UPDATE: Compass Point Initiates Nelnet at Buy on Cash Flow, Catalysts

Compass Point initiated coverage on Nelnet

with a Buy rating and a $41.00 price target. Compass Point commented, "At first glance, the Nelnet story may appear uninspiring as the company no longer originates federal student loans, and earnings, which are primarily tied to the legacy Federal Family Education Loan Program (FFELP), should ultimately trend lower. However, beneath the surface, we believe the company represents an underappreciated, undervalued, and low-risk cash flow story; and although the stock has recently outperformed, several potential catalysts lie ahead related to FFELP M&A and additional capital activity, that should drive another leg up in the stock." Nelnet closed at $34.49 on Thursday.