Rocket Companies has a track record of gaining ground as rates rise, so investors should buy shares of the mortgage loan company while they’re still cheap, according to Morgan Stanley. The investment bank upgraded the housing-focused fintech to overweight from equal weight. It also raised its price target on shares to $19 from $18, implying roughly 30% upside from Wednesday’s close. “We see favorable risk-reward [for Rocket],” analyst Jeffrey Adelson said Wednesday in a note to clients. “The stock tends to outperform the market following peak negativity around higher rates … [and] continued share gains and execution on operating leverage/deal synergies nonetheless position RKT for strong [earnings per share] growth from here.” Shares of the Redfin and Rocket Loans owner have fallen nearly 25% year to date amid heightened volatility in the mortgage market. Mortgage rates rose last week to their highest level since August 2025, leading homebuyer requests loans to fall, according to the Mortgage Bankers Association’s seasonally adjusted index. Those rates seem poised to trend even higher in the near-term, with markets now pricing in at least two interest rate hikes by early 2027, per Morgan Stanley. Nevertheless, Rocket has a history of gaining ground when rates peak, meaning it could deliver strong returns to investors over the next year, Adelson noted. “Setup is most favorable when rates peak,” the analyst wrote. “Over [the] past 5 yrs, RKT on avg. has risen more than 2x broader stocks in [a six-month] period after a rate mini peak.” Morgan Stanley’s call goes against consensus on Wall Street. Of the 18 analysts covering Rocket, 10 have a hold rating on the stock, while 8 have a buy or strong buy on it, LSEG data shows.
Rocket Companies to rise even as loan demand falls, per Morgan Stanley
