BofA Securities recently updated its price target for SLM Corp. (NASDAQ:SLM), decreasing it from $35.00 to $32.00. Despite this reduction, the investment firm continues to endorse a Buy rating for the student loan lender. The adjusted valuation still indicates a substantial upside of around 20% compared to SLM's current share price of $26.70. Analyst price targets for the stock vary widely, spanning between $23 and $37.
This reassessment follows SLM Corp.'s release of its fourth-quarter financial results, where the company reported diluted earnings per share (EPS) of $1.12. This figure surpassed expectations significantly, topping BofA's forecasted EPS of $0.91 and the broader market consensus estimate of $0.93. Over the trailing twelve months, SLM has maintained profitability with a diluted EPS totaling $2.84.
The company's latest earnings outperformance was primarily attributed to a $19 million release in loan loss provisions, a consequence of selling a $1 billion loan portfolio to private equity firm KKR. Additionally, SLM benefited from slightly decreased operating expenses during the quarter.
Looking ahead, BofA underscored the long-term prospects for SLM, pointing to an identified $5 billion total addressable market opportunity arising from Grad PLUS loans starting in 2026 and expected to ramp through 2027. The firm projects earnings per share growth in the high teens to low twenties percentage range by 2027, driven by maturation of new funding partnerships.
BofA's sustained Buy recommendation rests on SLM's competitive advantages, including a leading market share position and favorable funding structures that underpin strong financial returns.
Supporting this outlook, SLM reported robust revenue for the recent quarter at $454 million, modestly ahead of the anticipated $442.73 million. The EPS result of $1.12 was roughly 19.15% above the forecasted $0.94, illustrating the company's ability to exceed market expectations consistently. No mergers or acquisitions were disclosed in the reporting period, and there were no analyst rating changes subsequent to the earnings announcement.
These developments reinforce SLM Corp.'s solid financial footing and effective execution within the student loan sector, as it continues to generate growth and profitability beyond analyst projections.