Rocket's (RKT) valuation is "much more balanced at current levels" as the company now trades at about 18 times estimated 2025 earnings per share, BofA Securities said in a note Friday.
It's still higher than the peer average but "well below" the September high of 35 times, BofA said.
"At this valuation, we think upside/downside risks are nicely balanced," BofA said.
The firm said a "more favorable rate environment" could result in higher originations and cause Rocket's operating leverage "to come to the fore."
Conversely, higher-for-longer rates would delay an increase in Rocket earnings but the company is still expected to remain profitable, BofA said.
BofA upgraded Rocket to neutral from underperform, with a $15 price objective.
Price: 13.59, Change: -0.07, Percent Change: -0.51
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