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%.

Shares of Navient Corporation (NASDAQ:NAVI - Get Free Report) 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 trading hands.

Several other equities research analysts also recently weighed in on the stock. Morgan Stanley reduced their target price on shares of Navient from $15.00 to $14.00 and set an "equal weight" rating on the stock in a research note on Thursday, July 31st. JPMorgan Chase & Co. increased their price objective on shares of Navient from $12.50 to $15.50 and gave the stock a "neutral" rating in a research report on Friday, July 11th. Finally, Keefe, Bruyette & Woods cut their target price on Navient from $16.50 to $15.00 and set a "market perform" rating on the stock in a research note on Thursday, July 31st. One equities research analyst has rated the stock with a Strong Buy rating, four have assigned a Hold rating and four have assigned a Sell rating to the company's stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Reduce" and an average target price of $13.06.

Institutional Trading of Navient

Large investors have recently made changes to their positions in the company. Orbis Allan Gray Ltd raised its position in shares of Navient by 23.2% in the second quarter. Orbis Allan Gray Ltd now owns 2,848,718 shares of the credit services provider's stock valued at $40,167,000 after buying an additional 536,933 shares during the last quarter. Wellington Management Group LLP raised its holdings in Navient by 47.4% in the 4th quarter. Wellington Management Group LLP now owns 1,315,841 shares of the credit services provider's stock valued at $17,488,000 after acquiring an additional 423,013 shares during the last quarter. Charles Schwab Investment Management Inc. lifted its stake 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 in the last quarter. Voloridge Investment Management LLC purchased a new stake in shares of Navient in the fourth quarter valued at approximately $4,009,000. Finally, Lighthouse Investment Partners LLC purchased a new position in shares of Navient during the 4th quarter worth $3,717,000. 97.14% of the stock is currently owned by hedge funds and other institutional investors.

Navient Trading Down 1.0%

The company has a quick ratio of 9.94, a current ratio of 9.94 and a debt-to-equity ratio of 16.52. The company's 50-day moving average is $13.77 and its 200-day moving average is $13.27. The stock has a market capitalization of $1.34 billion, a price-to-earnings ratio of 43.37 and a beta of 1.35.

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

Navient Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, September 19th. Stockholders of record on Friday, September 5th will be issued a $0.16 dividend. This represents a $0.64 dividend on an annualized basis and a dividend yield of 4.8%. The ex-dividend date is Friday, September 5th. Navient's dividend payout ratio (DPR) is presently 206.45%.

About Navient

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.