On Friday, RBC Capital adjusted its outlook on Rocket Companies Inc. (NYSE:RKT), increasing the price target to $14.00 from the previous $12.00. The firm sustained its Sector Perform rating on the company's stock. This decision followed Rocket's first-quarter results for 2024, which surpassed both RBC Capital's and Street's expectations.
According to the firm's analysis, Rocket Companies demonstrated a significant 19% year-over-year increase in origination volume, an impressive feat in a market that has shown little overall industry growth. This performance indicates Rocket's expanding market share in both purchase and refinancing originations.
The company's financial health was further evidenced by its operating efficiencies. Despite a substantial year-over-year increase in originations and a corresponding 32% rise in adjusted revenue, Rocket managed to keep its operating expenses stable.
RBC Capital's revised price target reflects the strength observed in Rocket's recent performance. The firm's commentary highlighted the operating leverage inherent in Rocket's business model, which has allowed the company to grow revenue while controlling costs effectively.
The upgraded price target to $14 from $12 is a direct result of the company's financial outcomes, as reported in the first quarter of 2024. Rocket Companies' ability to outperform expectations and continue gaining market share has been recognized by RBC Capital in its latest assessment.
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