Morgan Stanley has upgraded Rocket Companies (RKT) to ‘overweight’, forecasting a 30% stock price increase. The firm believes Rocket’s ability to gain market share and execute effectively, even with rising rates and falling loan demand, positions it for strong earnings growth.
Despite current market headwinds, analyst Jeffrey Adelson noted Rocket’s historical tendency to outperform after interest rate peaks, suggesting a favorable risk-reward profile for investors.
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Morgan Stanley has upgraded Rocket Companies (RKT), the parent of Rocket Mortgage, to 'overweight' from 'equal weight', predicting a potential 30% increase in its stock price. The investment bank cited the company's historical ability to gain market share and its strong execution even as demand for loans dwindles and interest rates climb.
Analyst Jeffrey Adelson highlighted that Rocket's stock tends to outperform during periods of peak negativity surrounding rising interest rates. "We see favorable risk-reward [for Rocket]," Adelson stated 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."
Despite a nearly 25% year-to-date decline in its share price, largely due to volatility in the mortgage market, Morgan Stanley believes Rocket is poised for growth. Mortgage rates recently hit their highest point since August 2025, leading to a fall in homebuyer loan requests, according to the Mortgage Bankers Association. With markets anticipating at least two interest rate hikes by early 2027, rising rates could present a favorable environment for Rocket, which has a track record of performing well when rates peak.
"Setup is most favorable when rates peak," Adelson added. "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."
This optimistic outlook contrasts with the broader Wall Street consensus. Out of 18 analysts covering Rocket, 10 currently hold a 'hold' rating, while 8 recommend 'buy' or 'strong buy', according to LSEG data.
