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On Friday, Keefe, Bruyette & Woods maintained a Market Perform rating on Rocket Companies Inc . (NYSE:RKT) with a steady price target of $14.00. The firm’s analyst, Bose George, provided insights following recent developments involving United Wholesale Mortgage Corporation (UWMC), which announced the termination of its subservicing agreement with Mr. Cooper Group (COOP).
UWMC’s CEO, Matt Ishbia, disclosed the decision to end the subservicing relationship with COOP, a move that has been reported by HousingWire. The specifics of UWMC’s portfolio serviced by COOP were not disclosed, but Keefe, Bruyette & Woods analyst George suggested that even if COOP handled a significant portion of UWMC’s $230 billion portfolio, the impact on Rocket Companies’ earnings per share (EPS) would likely be minimal.
The analyst’s comments reflect an analysis of the situation, taking into account UWMC’s large portfolio and the practice of utilizing multiple subservicers. The implication is that COOP’s role within UWMC’s operations is not singular or exclusive, thus mitigating the potential financial implications for Rocket Companies.
Rocket Companies, a Detroit-based holding company consisting of personal finance and consumer service brands, has not publicly commented on the subservicing agreement’s termination or its potential effects.
The reaffirmed price target and rating by Keefe, Bruyette & Woods indicate a neutral outlook on Rocket Companies’ stock, suggesting that the investment firm does not foresee a major shift in the company’s stock performance in the immediate future.
In other recent news, Rocket Companies Inc. announced its planned acquisition of Mr. Cooper in an all-stock deal valued at $9.4 billion, which is anticipated to close in the fourth quarter of 2025. This acquisition is expected to significantly enhance Rocket’s market position, earnings, and stability, as it will increase its servicing clients to nearly 10 million. S&P Global Ratings revised its outlook for Rocket Mortgage from stable to positive following this announcement, citing the potential benefits to Rocket’s diversification and market position. Deutsche Bank (ETR:DBKGn) upgraded Rocket Companies from Hold to Buy, raising its price target to $16.00, and highlighted the acquisition’s potential to achieve Rocket’s market share goals for 2027. This upgrade reflects confidence in Rocket’s strategic direction and the anticipated 38% increase in earnings per share by 2027.
Meanwhile, UBS maintained a Neutral rating with a $14.00 price target, acknowledging the strategic and financial rationale of the acquisition but pointing out valuation concerns. Keefe, Bruyette & Woods kept an Underperform rating with a $12.00 target, noting the acquisition’s potential to transform Rocket’s mortgage servicing business and yield $500 million in annual pre-tax revenue and cost synergies by 2027. The acquisition is seen as a significant development for Rocket Companies, aiming to enhance its position within the mortgage servicing industry. Despite potential integration challenges, the acquisition could reshape Rocket’s financial landscape and market position.
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