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Stock impact report

Jefferies initiates mortgage finance sector, flags scale as key to recovery [Yahoo! Finance]

Rocket Companies, Inc. Class A (RKT) 
Company Research Source: Yahoo! Finance
The brokerage said the interest-rate environment has become less restrictive for mortgage originators, supporting a recovery in volumes. Jefferies, citing Fannie Mae forecasts used in its models, said total mortgage originations are expected to rise to $2.3T in 2026 and $2.5T in 2027, in line with long-run averages. The forecasts also assume a 40-basis-point decline in the 30-year fixed mortgage rate to 5.9% by the end of 2026, from about 6.3% at the time of the report. Within the sector, Jefferies initiated coverage on Rocket Companies, PennyMac Financial Services and Walker & Dunlop with “buy” ratings, while starting UWM Holdings at “hold.” The brokerage said larger, diversified platforms with meaningful servicing operations are positioned to generate more stable earnings as volumes recover, compared with more narrowly focused originators. Jefferies named Rocket Companies as its highest-conviction call in the sector, assigning a “buy” rating and a $25 price target. The Show less Read more
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