Navient (NASDAQ:NAVI) Shares Gap Down Following Analyst Downgrade

Key Points

• Navient Corporation's stock gapped down after Bank of America downgraded it from a neutral to an underperform rating, with a new price target set at $12.00.
• The company reported missed earnings with EPS of $0.21, falling short of the consensus estimate of $0.27, along with a revenue of $156 million compared to an expected $156.20 million.
• Navient announced a quarterly dividend of $0.16 with a yield of 4.8%, although its payout ratio is notably high at 206.45%.

Navient Corporation (NASDAQ:NAVI - Get Free Report)'s stock price gapped down before the market opened on Thursday after Bank of America downgraded the stock from a neutral rating to an underperform rating. The stock had previously closed at $13.64, but opened at $13.03. Bank of America now has a $12.00 price target on the stock. Navient shares last traded at $13.21, with a volume of 371,965 shares changing hands.

NAVI has been the subject of several other research reports. JPMorgan Chase & Co. boosted their price target on Navient from $12.50 to $15.50 and gave the company a "neutral" rating in a research note on Friday, July 11th. Keefe, Bruyette & Woods lowered their price target on Navient from $16.50 to $15.00 and set a "market perform" rating for the company in a research note on Thursday, July 31st. Finally, Morgan Stanley lowered their price target on Navient from $15.00 to $14.00 and set an "equal weight" rating for the company in a research note on Thursday, July 31st. One investment analyst has rated the stock with a Strong Buy rating, four have issued a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat, Navient presently has an average rating of "Reduce" and an average price target of $13.06.

Institutional Investors Weigh In On Navient

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Charles Schwab Investment Management Inc. lifted its holdings in Navient by 32.6% in the 1st quarter. Charles Schwab Investment Management Inc. now owns 1,439,903 shares of the credit services provider's stock worth $18,186,000 after purchasing an additional 353,898 shares during the last quarter. Allianz Asset Management GmbH lifted its holdings in Navient by 47.1% in the 1st quarter. Allianz Asset Management GmbH now owns 381,040 shares of the credit services provider's stock worth $4,813,000 after purchasing an additional 122,061 shares during the last quarter. Hsbc Holdings PLC lifted its holdings in shares of Navient by 31.5% during the first quarter. Hsbc Holdings PLC now owns 163,995 shares of the credit services provider's stock worth $2,068,000 after buying an additional 39,315 shares during the last quarter. Bank of America Corp DE lifted its holdings in shares of Navient by 69.4% during the fourth quarter. Bank of America Corp DE now owns 667,372 shares of the credit services provider's stock worth $8,869,000 after buying an additional 273,483 shares during the last quarter. Finally, Two Sigma Investments LP lifted its holdings in shares of Navient by 39.0% during the fourth quarter. Two Sigma Investments LP now owns 130,046 shares of the credit services provider's stock worth $1,728,000 after buying an additional 36,498 shares during the last quarter. 97.14% of the stock is currently owned by institutional investors and hedge funds.

Navient Trading Down 0.9%

The company has a market capitalization of $1.35 billion, a price-to-earnings ratio of 43.90 and a beta of 1.35. The business has a fifty day moving average price of $13.78 and a 200 day moving average price of $13.27. The company has a debt-to-equity ratio of 16.52, a current ratio of 9.94 and a quick ratio of 9.94.

Navient (NASDAQ:NAVI - Get Free Report) last issued its quarterly earnings results on Wednesday, July 30th. The credit services provider reported $0.21 EPS for the quarter, missing analysts' consensus estimates of $0.27 by ($0.06). Navient had a return on equity of 4.08% and a net margin of 0.89%.The business had revenue of $156.00 million for the quarter, compared to analyst estimates of $156.20 million. During the same quarter last year, the firm earned $0.29 earnings per share. Navient has set its FY 2025 guidance at 0.950-1.050 EPS. On average, equities analysts expect that Navient Corporation will post 1.04 EPS for the current fiscal year.

Navient Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, September 19th. Stockholders of record on Friday, September 5th will be issued a dividend of $0.16 per share. The ex-dividend date is Friday, September 5th. This represents a $0.64 dividend on an annualized basis and a dividend yield of 4.7%. Navient's payout ratio is 206.45%.

Navient Company Profile

Navient Corporation provides technology-enabled education finance and business processing solutions for education, health care, and government clients in the United States. It operates through three segments: Federal Education Loans, Consumer Lending, and Business Processing. The company owns Federal Family Education Loan Program (FFELP) loans that are insured or guaranteed by state or not-for-profit agencies; and performs servicing on its portfolios, as well as federal education loans held by other institutions.