Analyst Jeffrey Adelson of Morgan Stanley maintained a Hold rating on Rocket Companies, retaining the price target of $16.00.
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Jeffrey Adelson’s rating is based on a combination of strategic and market considerations. The recent COOP acquisition is viewed positively as it enhances Rocket Companies’ ability to leverage its origination capabilities to expand its servicing portfolio. This strategic move is seen as potentially providing long-term advantages over competitors, although there are concerns about the risks associated with acquiring a capital-intensive asset.
Additionally, while Rocket Companies has set ambitious market share targets for refinancing and purchase mortgages, the achievement of these goals is largely contingent on mortgage rates falling below 6%. There is skepticism about the company’s ability to meet its purchase market share ambitions, particularly given the current market dynamics. Furthermore, the FHFA’s cap on the combined company’s servicing market share is seen as a negative surprise, though it is considered manageable. These factors collectively contribute to the Hold rating, reflecting a balanced view of potential opportunities and risks.
According to TipRanks, Adelson is an analyst with an average return of -9.9% and a 42.47% success rate. Adelson covers the Financial sector, focusing on stocks such as Bread Financial Holdings, American Express, and Capital One Financial.
In another report released on September 9, KBW also maintained a Hold rating on the stock with a $15.00 price target.