SLM’s Strategic Positioning and Policy Shifts Justify Buy Rating

Morgan Stanley analyst Jeffrey Adelson maintained a Buy rating on SLM (SLM – Research Report) today and set a price target of $40.00.

Jeffrey Adelson has given his Buy rating due to a combination of factors including the potential for significant student loan reform and SLM’s strategic positioning. The political landscape is increasingly supportive of reforming federal student loan policies, which could lead to a reduction in federal graduate lending. This environment is seen as favorable for SLM, as they are preparing to capitalize on these changes.
Furthermore, SLM is actively exploring alternatives to traditional loan sales, such as partnerships and joint ventures, which could enhance their financial performance through more stable, asset-light cash flows. Adelson also notes the company’s strong credit performance and successful mitigation programs, which bolster confidence in its future earnings potential. Overall, these strategic moves and the anticipated policy shifts contribute to the positive outlook for SLM, justifying the Buy rating.

In another report released on May 15, Wells Fargo also reiterated a Buy rating on the stock with a $38.00 price target.

Based on the recent corporate insider activity of 65 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SLM in relation to earlier this year.