Analysis: First Marblehead Corporation (FMD) secures loans for private education in the US. Last quarterâs earnings were 58 cents per share on revenues of 77.5 million. EPS results topped analyst expectations by 2 cents. The companyâs earnings are anticipated to grow by 27.5% per year over the next five years. Next yearâs EPS estimates are for $1.27. This contrasts positively from the $1.14 that had been forecast 60 days ago. Current consensus for next yearâs earnings places the stock with a P/E ratio of 24; the forward P/EG ratio for the stock is .87. FMD carries $2.3 per share in cash. Overall, the company appears favorably valued with respect to prospects for growth. Business Risks: Nearly 60% of FMDâs loan securitization revenues were derived from a contract with Bank One. Should Bank One in the future decide to end the agreement in 2007, when the contract ends, it may deal a significant blow to FMD. The higher education act is currently being analyzed and revised. There is a possibility that the maximum federal loan value will be raised. If this occurs, it may remove a portion of FMDâs business. Key Levels: Limit Buy: $27.77, just above support formed from the last upside inversion point. Stop loss: $26.74. Target: We expect earnings of approx $1.4 per share next year. We anticipate the stock to be trading at roughly 25x earnings. As such, our target is $35.