Credit Suisse Upgrading SLM Corp.

Credit Suisse is upgrading shares of SLM Corp. SLM to Outperform and is raising its price target to $18 from $16. In a note to clients, Credit Suisse writes, "Rates lower for longer is good. SLM earns "floor income" which benefits the company when prevailing interest rates move below the fixed floor interest rate on FFELP loans. Both hedged and unhedged floor income provide incremental net income that adds value to the stock as interest rates are likely to remain low for the next two years. We believe the floor income could provide up to $3/share in value, in addition to our valuation of FFELP portfolio cash flows of $9/share. Of the $3, we conservatively include $2 of the hedged floor income in our price target." Shares of SLM lost 19 cents on Friday to close at $12.73.