SLM - SLM cut to Equal Weight at Wells Fargo on persistent credit issues

• Wells Fargo cut its rating on SLM ( NASDAQ: SLM ) to Equal Weight from Overweight, citing persistent credit issues that have "damaged" the management's credibility.
• "We do not see visible catalysts to move the shares higher, and we think it will take time to regain investor confidence," said analyst Michael Kaye.
• SLM ( SLM ) reported Q4 results earlier this week, posting an unexpected loss of $0.33, driven by a much higher provision expense as a result of forbearance policy changes and staffing/operational issues.
• "These issues are expected to persist in 2023 and to a lesser extent, 2024. This is concerning as management previously stated these items were largely behind the company," said Kaye.
• He noted that while consumer finance stocks are rallying on improved risk sentiment, issues at SLM ( SLM ) are more company-specific.
• Wells Fargo reduced its estimates for SLM ( SLM ) 2023 and 2024 EPS by $0.05 each to $2.50 and $2.70.
• The research firm's stance is in line with SA Quant's Hold rating , but contrasts bullish sell-side ratings .

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