HMPT - Rocket Mortgage stock cut to Neutral Home Point cut to Underperform at BofA

BofA Securities analyst Derek Hewett downgrades Rocket Companies (RKT), the owner of Rocket Mortgage, to Neutral from Buy and Home Point Capital (HMPT) to Underperform from Buy as he sees a less favorable interest rate backdrop and intensifying competition pressuring margins.RKT stock falls 1.5% in premarket trading."While we generally expect 1Q results to be solid — with most companies beating on volumes — we think the outlook for the remainder of the year is more challenging," Hewett writes in a note to clients.Leading indicators, namely primary-secondary spread and industry capacity, suggest that industry margins will likely weaken in 2021, he points out.BofA economists expect benchmark rates to rise for the rest of 2021 and into 2022.At the same time, mortgage industry employment has increased 20% Y/Y through February, a sign that the industry continues to build capacity.Hewett's view on RKT aligns with the average Wall Street rating of Neutral (3 Very

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Rocket Mortgage stock cut to Neutral, Home Point cut to Underperform at BofA