Analyst Jeffrey Adelson from Morgan Stanley maintained a Hold rating on Rocket Companies (RKT – Research Report) and keeping the price target at $12.00.
Jeffrey Adelson’s rating is based on a combination of factors that reflect both positive and negative aspects of Rocket Companies’ financial outlook. The company reported a slight earnings per share (EPS) beat due to disciplined expense management, although rate lock volumes were lower than expected. This shortfall was somewhat balanced by improved gain on sale (GoS) margins, and management expressed optimism about the housing market, anticipating a better year in 2025 compared to 2024.
Despite these positive signals, Adelson adjusted the first quarter 2025 EPS estimate down slightly due to lower revenue expectations stemming from the reduced rate lock volume base in the fourth quarter of 2024. While the company expects revenue growth in the first quarter of 2025 to be at the higher end of its guidance, the unchanged full-year EPS forecast for 2025 suggests that the initial growth outlook is tempered by the previous quarter’s performance. Additionally, anticipated increases in expenses related to higher loan production and marketing efforts were already factored into Adelson’s forecasts, leading to a Hold rating as the stock’s potential upside appears limited in the near term.
In another report released yesterday, Wells Fargo also reiterated a Hold rating on the stock with a $15.00 price target.