Rocket is an “undisputed industry leader”. The stock is upgraded twice.

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A pedestrian wearing a protective mask walks past Rocket Companies Inc. signage displayed on The Chase Towers building, home to Quicken Loans, in Detroit, Michigan

Emily Elconin/Bloomberg


Rocket

Shares slid higher on Wednesday after the mortgage lender received a double upgrade from JP Morgan.

Analyst Richard Shane raised Rocket (ticker:


RKT

) to Overweight from Underweight, while reducing its price target to $15 from $17.50 previously. The stock is Shane’s favorite name heading into the fourth quarter earnings season.

“Our overweight rating is based on our view that RKT is an undisputed industry leader and that stocks now offer a much more compelling risk/reward profile,” Shane wrote on Wednesday.

The company has developed an “end-to-end integrated technology platform” that brings scale and efficiency to a fragmented market, Shane added.

Shane expects Rocket to continue to grow its market share as it invests in its direct-to-consumer services and as the industry enters a period of consolidation. The analyst raised his earnings per share estimate for fiscal 2023 to $1.69 from $1.58 previously.

Last December, Rocket announced that it would acquire TrueBill, a personal finance app, for $1.28 billion in a bid to increase recurring revenue and add customers.

Despite the tailwinds, Rocket could still fall victim to growing competition in mortgage lending and a recent spike in interest rates that could hamper its growth, the analyst said.

Rocket stock rose 1.4% to $13.16 on Wednesday. The stock has lost around 7% this year and nearly 35% throughout 2021.

Write to Sabrina Escobar at [email protected]

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