BTIG analyst Eric Hagen has maintained their neutral stance on COOP stock, giving a Hold rating on July 21.
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Eric Hagen has given his Hold rating due to a combination of factors related to Mr Cooper Group’s current financial situation and its merger with Rocket. The stock’s valuation around $160 per share reflects the terms of the merger deal, which includes a premium valuation compared to other top servicers. This premium is partly justified by Mr Cooper’s significant unsecured debt, which could position Rocket for a better investment-grade issuer rating post-merger.
Additionally, the stability of Mr Cooper’s mortgage servicing rights (MSR) valuations is crucial for Rocket to achieve the projected $500 million in synergies by 2027. While there is potential for synergies from the merger, the timeline could be affected by fluctuations in refinancing activity. The recent financial performance of Mr Cooper, including a modest increase in book value per share and operating income, supports a cautious outlook, leading to the Hold rating.
Hagen covers the Real Estate sector, focusing on stocks such as Dynex Capital, Rithm Capital, and ARMOUR Residential REIT. According to TipRanks, Hagen has an average return of 3.0% and a 53.81% success rate on recommended stocks.
In another report released on July 21, Jefferies also maintained a Hold rating on the stock with a $150.00 price target.