Rocket Companies Inc got a big boost on Wednesday after Bank of America upgraded the mortgage lender to Buy from Neutral, saying falling interest rates and upcoming deal synergies should meaningfully lift earnings. The brokerage also raised its price target to $24 from $21, signalling more optimism about the stock’s upside.
“Don’t overthink it – lower rates are good for Rocket,” Bank of America analysts wrote in their note. With around 10% market share in mortgage refinancing, Rocket stands out as one of the biggest winners whenever borrowing costs drop. Mortgage rates have already eased to 6.55%, the lowest level since February 2023, fueling expectations of a stronger refinancing cycle.
Bank of America now expects the Federal Reserve to cut rates twice this year and three more times in 2026. Lower rates typically drive homeowners to refinance, and data already shows signs of a rebound. Refinancing applications jumped when rates slipped into the 6.6% to 6.7% range in June, and Rocket itself reported stronger refi activity in the second quarter. Analysts believe volumes could accelerate even further if mortgage rates continue drifting downward.
Reflecting this, the brokerage lifted its 2026 earnings forecast for Rocket by 11% to $1.02 a share. It also projected a 5% larger mortgage market overall under lower rate conditions, giving Rocket more room to expand.
Beyond rate cuts, Bank of America highlighted Rocket’s deal-making as another driver of growth. The company is working on a $12 billion acquisition of Mr. Cooper, a major mortgage servicing firm. Rocket has already outlined about $500 million in expected cost and revenue synergies from the merger, but analysts think there may be more upside. Notably, 22% of Mr. Cooper’s servicing portfolio carries mortgage rates above 6%, leaving plenty of opportunities for refinancing once rates move lower.
On top of that, Rocket’s recent acquisition of Redfin is also expected to contribute around $200 million in synergies. Bank of America noted that integration is on track, providing another layer of support for earnings growth.
Taken together, analysts see the potential for a “positive revision cycle” as estimates for the overall mortgage market size increase. That could push expectations for Rocket’s earnings even higher in the coming quarters.
Still, the bank flagged some risks. If mortgage rates stay elevated for longer than expected, refinancing demand could remain muted, which would weigh on Rocket’s growth outlook. For now, though, the combination of easing rates and deal synergies has shifted sentiment firmly in Rocket’s favor.