SLM Q2 net income falls
SLM Q2 net income falls
Overview
U.S. private student lender's Q2 net income fell and GAAP EPS declined yr/yr
Private education loan originations rose 4.5% from a year earlier
Company completed $200 mln accelerated share repurchase and sold $420 mln in loans
Outlook
Company expects 2026 diluted EPS of $3.10 to $3.20
Company sees 2026 private education loan origination growth of 12% to 14%
Company forecasts 2026 net charge-offs of $365 mln to $385 mln
Result Drivers
LOAN ORIGINATIONS - Private education loan originations rose 4.5% yr/yr, reflecting continued demand
HIGHER CHARGE-OFFS - Net charge-offs increased to $113 mln, attributed to misaligned third-party debt resolution practices affecting a small, high-ability-to-pay segment
BALANCE SHEET ACTIONS - Sale of $420 mln in loans and $200 mln accelerated share repurchase supported earnings and capital deployment
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Net Income |
| $59 mln |
|
Q2 Credit Loss Provision |
| $126 mln |
|
Q2 ROCE |
| 9.9% |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the consumer lending peer group is "buy"
Wall Street's median 12-month price target for SLM Corp is $28.50, about 13% above its July 22 closing price of $25.22
The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 7 three months ago
Reuters Recommended Reads
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)