Morgan Stanley Upgrades Rocket Companies, Predicting Strong Gains Despite Declining Loan Demand

Morgan Stanley has upgraded Rocket Companies to an “overweight” rating from “equal weight,” suggesting that investors should take advantage of the current low share price. The investment bank also increased its price target for the mortgage fintech firm to $19 from $18, signaling a potential 30% upside from Wednesday’s closing price. “We see favorable risk-reward for Rocket,” analyst Jeffrey Adelson stated in a client note on Wednesday. “The stock tends to outperform the market following peak negativity around higher rates… and continued market share gains, along with execution on operating leverage and deal synergies, position RKT for robust earnings per share growth moving forward.”

Shares of the Redfin and Rocket Loans owner have declined nearly 25% year-to-date due to volatility in the mortgage sector. According to the Mortgage Bankers Association’s seasonally adjusted index, mortgage rates rose last week to their highest levels since August 2025, resulting in a drop in homebuyer loan applications. While markets are currently pricing in at least two interest rate hikes by early 2027, Morgan Stanley suggests that Rocket historically gains momentum once rates reach their peak. “The setup is most favorable when rates peak,” Adelson noted, adding that over the last five years, RKT has averaged more than double the returns of the broader market during six-month periods following a rate mini-peak.

Morgan Stanley’s optimistic outlook diverges from the broader Wall Street consensus. According to LSEG data, of the 18 analysts covering Rocket, 10 maintain a “hold” rating, while 8 maintain a “buy” or “strong buy” rating.

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