Keefe upgrades Rocket on 50% return potential after selloff

Keefe Bruyette analyst Bose George upgraded Rocket Companies (RKT) to Outperform from Market Perform with a price target of $22, up from $20. The firm cites valuation for the upgrade with the shares down 25% year-to-date. Under Keefe’s base case outlook for mortgage fundamentals and Rocket’s earnings, the current shares “screen favorably,” the analyst tells investors in a research note. The firm estimates a 50% total return over the next 12 months. The fundamental changes to Rocket’s ecosystem and earnings mix create more durable long-term earnings potential, increasing the likelihood of sustained market share gains across both purchase and refinance over time, contends Keefe.