JMP reiterates Market Perform rating on Mr. Cooper stock ahead of Q2 earnings

Investing.com - JMP Securities has reiterated its Market Perform rating on Mr. Cooper Group Inc. (NASDAQ:COOP), the country’s largest mortgage servicer, ahead of the company’s second-quarter 2025 earnings report expected next week. The company’s stock, currently trading at $148.20, has demonstrated remarkable strength with a 54.36% gain year-to-date, according to InvestingPro data.

The firm’s decision comes following Mr. Cooper’s announced sale to Rocket Companies Inc. on March 31, 2025, which prompted JMP to revisit its earnings model for the mortgage servicer.

JMP believes Mr. Cooper shares are currently fairly valued at 11.4 times estimated 2025 operating earnings per share, which aligns directly with the mortgage-operating company peer group median of 11.4 times.

The rating maintenance reflects JMP’s neutral stance on Mr. Cooper’s stock performance potential in the current market environment, considering both the pending acquisition and the company’s fundamental position.

Mr. Cooper Group remains the largest mortgage servicer in the United States for now, though this status will change following the completion of its acquisition by Rocket Companies.

In other recent news, Mr. Cooper Group Inc. reported its first-quarter 2025 earnings, revealing a significant shortfall in both earnings per share (EPS) and revenue compared to analyst forecasts. The company posted an EPS of $1.35, falling short of the expected $2.98, and reported revenue of $560 million, which was below the forecasted $620.43 million. Despite these misses, Mr. Cooper’s stock rose by 4.4% in premarket trading. Meanwhile, the company’s merger with Rocket Companies is progressing, with the expiration of the Hart-Scott-Rodino Antitrust Improvements Act waiting period satisfying a key condition for completion. The merger is expected to finalize in the fourth quarter of 2025, pending regulatory and shareholder approvals. UBS downgraded Mr. Cooper from Buy to Neutral following the announcement of the $9.4 billion all-stock acquisition by Rocket Companies, reflecting the dynamics of the deal. Jefferies highlighted potential risks for mortgage lenders, including Mr. Cooper, due to the possible privatization of Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC), which could impact market conditions. These developments are shaping the current landscape for Mr. Cooper Group and its stakeholders.

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