Benchmark initiated coverage of Rocket with a Buy rating, citing long-term real estate platform potential despite high rates.
- Benchmark's $21 price target implies 35% upside for Rocket Companies.
- The firm said Rocket's long-term opportunity lies in becoming a leading online real estate platform alongside Zillow.
- Rocket has faced pressure from persistent inflation, high mortgage rates and limited housing supply.
Rocket Companies (RKT) stock received a bullish initiation from Benchmark, which began coverage with a Buy rating and a $21 price target, noting that the mortgage lender's long-term investment appeal extends beyond fluctuations in borrowing costs and instead points to its broader ambitions in the residential real estate market.
RKT Long-Term Growth Outlook Appears Bright
The new price target implies a 35% upside potential to RKT’s last closing price. Benchmark said the central investment case is not tied solely to interest rate movements. Instead, the firm believes Rocket has the potential to emerge as one of the two leading online real estate platforms over the coming decade, alongside Zillow Group (ZG, Z).
Benchmark said that although mortgage rates are important for the housing market, investors should not judge Rocket's long-term prospects based on interest rates alone.
The firm's analysis emphasizes the company's strategic positioning and its ability to expand its role across the homebuying ecosystem, rather than relying exclusively on refinancing or purchase-loan activity.
Rocket Companies’ stock edged 0.6% higher overnight, ahead of Tuesday.
High Rates Continue To Weigh On RKT
After entering the year on optimism that lower interest rates would revive mortgage demand, Rocket Companies instead faced a backdrop of persistent inflation, elevated borrowing costs, and continued housing supply constraints, weighing on investor sentiment.
Rocket's business depends heavily on mortgage activity, so higher interest rates have hurt demand. High home prices and expensive borrowing have made homes less affordable, keeping new mortgage and refinancing activity weaker than many investors expected.
Debt Refinance Raises Fresh Questions
Investor concerns also increased after Rocket raised $1.5 billion this month to refinance existing debt. Although the deal gives the company more time to repay its loans, it also means paying higher interest, reflecting the higher cost of borrowing.
For fiscal second-quarter 2026, the company expects adjusted revenue between $2.7 billion and $2.9 billion, against the Street view of $2.89 billion, according to Fiscal AI data.
RKT Retail Traders View
On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory with a 633% jump in message volume in 24 hours.
A user said, “no reason for this not to be above 40 at this point, huge company. Way undervalued and beat down by the market Manipulation.”
Another user said, “Rocket’s servicing platform now includes approximately $2.1 trillion in unpaid principal balance,” and added, “The market eventually re-rates businesses that become fundamentally different from what investors think they are.”
RKT stock has declined over 19% year-to-date, while ZG stock has cratered 53%.
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