Investors should buy the mortgage company’s stock while it’s still cheap because Rocket Companies has a track record of profiting as interest rates rise, according to Morgan Stanley. The investment bank upgraded the housing-focused fintech from equal weight to overweight. He also raised his price target for the stock from $18 to $19, suggesting an increase of about 30% from Wednesday’s closing price. “We believe the risk/reward profile is favorable for (Rocket),” analyst Jeffrey Adelson said in a note to clients on Wednesday. “After negative peaks around rising interest rates, stock prices tend to outperform the market… (and) continued stock price appreciation and execution of operating leverage/transaction synergies positions RKT for continued strong (earnings per share) growth.” Shares of Redfin and the owner of Rocket Loans have fallen nearly 25% since the beginning of the year amid heightened volatility in the mortgage market. Mortgage rates rose last week to their highest level since August 2025, and homebuyer loan requests declined, according to the Mortgage Bankers Association’s seasonally adjusted index. According to Morgan Stanley, the market is currently pricing in at least two rate hikes by early 2027, and these rates appear to be trending higher in the short term. Nevertheless, Adelson noted that Rocket has a history of gaining momentum when interest rates peak, meaning it could deliver big gains for investors over the next year. “The most advantageous setting is when interest rates peak,” the analyst said. “Over the past five years, RKT has, on average, risen more than twice as much as the broader market in the (six-month) period after interest rate mini-peaks.”Morgan Stanley’s call runs counter to Wall Street consensus. Of the 18 analysts covering Rocket, 10 rate it a “hold” and eight rate it a “buy” or “strong buy,” according to LSEG data.
