Followers | 137 |
Posts | 18297 |
Boards Moderated | 8 |
Alias Born | 05/28/2009 |
Monday, November 12, 2012 2:55:54 PM
Solid 3Q Results; FFELP Cash Flows To Add Value; Upgrading to OP and Raising TP to $33
After 3Q results, we upgrade Nelnet to Outperform and raise our target price from $29 to $33. The increase in our TP is driven by additional value of $3/shr from FFELP portfolio acquisitions and securitizations and $1/shr from 2013-based valuation of fee and servicing businesses. This valuation is supported by more active capital management, as NNI has declared a $1/share special dividend for 4Q. Nelnet posted a solid 3rd quarter and a better FFELP NIM than we had expected. Cash flows for its FFELP portfolio increased $10MM in 3Q to $1.88Bn, despite a shrinking portfolio. NNI indicated that in 4Q, it purchased $1.1Bn of FFELP loans and expects to purchase more in 4Q12. Our cash flow forecast includes loans purchased to date. On fee income, we update our valuation to reflect 2013 earnings estimates and NNI’s increased ED contract share for 2012-13 (30%,
up from 16%), which increases the fee income valuation to $12/shr. Our valuation is supported by capital return and NNI’s $1.00/shr special dividend.
Increasing estimates and target price. We are increasing our 2012, 2013 and 2014 estimates to $4.50, $4.85 and $4.85 to reflect 3Q results, loan purchases of $1.1Bn in 4Q, and a stronger FFELP NIM. Further FFELP purchases of $1Bn would add ~$0.15/share to our EPS estimates. Our sum-of-the-parts target price valuation increases $4 to $33. A 6% discount rate on the FFELP portfolio cash flows implies $21/shr of value. We then
attribute $12 to the fee-based businesses based on 2013 EPS projections for the businesses to reach our $33 price target, or 1.2x forward TBV.
Recent NNI News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/17/2024 08:59:53 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/17/2024 08:57:45 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/03/2024 09:18:27 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 09/03/2024 09:15:22 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/23/2024 09:09:19 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/08/2024 08:17:07 PM
- Nelnet Reports Second Quarter 2024 Results • PR Newswire (US) • 08/08/2024 08:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/31/2024 11:13:14 AM
- FACTS Expands Education Technology Suite to Serve Corporate and Faith-Based Organizations • PR Newswire (US) • 07/23/2024 07:30:00 PM
- Nelnet to Announce Second Quarter Results • PR Newswire (US) • 07/11/2024 08:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/18/2024 09:42:37 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/18/2024 08:21:13 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/18/2024 08:18:44 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/18/2024 08:16:46 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/18/2024 08:14:29 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/18/2024 08:12:11 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/18/2024 08:09:17 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/12/2024 09:00:01 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/10/2024 08:35:55 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/06/2024 08:05:23 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 09:10:41 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 09:08:55 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/21/2024 08:06:52 PM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 09:14:59 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/09/2024 08:16:50 PM
North Bay Resources Commences Operations at Bishop Gold Mill, Inyo County, California; Engages Sabean Group Management Consulting • NBRI • Sep 25, 2024 9:15 AM
CEO David B. Dorwart Anticipates a Bright Future at Good Gaming Inc. Through His Most Recent Shareholder Update • GMER • Sep 25, 2024 8:30 AM
Cannabix Technologies and Omega Laboratories Inc. Advance Marijuana Breathalyzer Technology - Dr. Bruce Goldberger to Present at Society of Forensic Toxicologists Conference • BLOZF • Sep 24, 2024 8:50 AM
Integrated Ventures, Inc Announces Strategic Partnership For GLP-1 (Semaglutide) Procurement Through MedWell USA, LLC. • INTV • Sep 24, 2024 8:45 AM
Avant Technologies Accelerates Creation of AI-Powered Platform to Revolutionize Patient Care • AVAI • Sep 24, 2024 8:00 AM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM