Analyst Mihir Bhatia from Bank of America Securities reiterated a Hold rating on Rocket Companies and keeping the price target at $15.00.
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Mihir Bhatia has given his Hold rating due to a combination of factors impacting Rocket Companies. The company’s second-quarter performance was solid, with adjusted earnings per share exceeding expectations, driven by higher gain on sale margins. However, the outlook for the third quarter presents challenges, as operating expenses are anticipated to rise significantly, partly due to the costs associated with the Redfin acquisition.
Despite these challenges, Rocket Companies is taking steps to manage costs, including reducing marketing expenses and benefiting from cost savings related to business exits and headcount reductions. The company’s revenue projections for the third quarter are in line with expectations, and there is optimism about potential revenue synergies from the Redfin acquisition. Nonetheless, the overall performance and future results are expected to be influenced by broader macroeconomic factors and interest rates, leading to the reiteration of a Hold rating.
In another report released today, Barclays also maintained a Hold rating on the stock with a $16.00 price target.
RKT’s price has also changed moderately for the past six months – from $12.600 to $14.770, which is a 17.22% increase.