Zacks Investment Research downgraded shares of SLM Corporation (SLM) from OUTPERFORM to NEUTRAL on January 08, 2013, with a target price of $18.00.
We are downgrading our recommendation on Sallie Mae to Neutral from Outperform based on declining interest income. However, the company's third-quarter 2012 core earnings per share beat the Zacks Consensus Estimate. Results were aided by lower loan loss provision, reduced operating expenses and higher debt repurchase gains. However, declining net interest income remained a headwind. Despite challenges, we believe that its leading position in the student lending market, diversifying efforts, cost containment measures and increasing private student loan originations would help the company navigate well through the current cycle. In addition, federal student loan asset acquisition serves as a positive catalyst. The company's capital deploying efforts are impressive and we believe that it will succeed in managing the regulatory issues.
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