RKT - Rocket stock drops after to Jefferies downgrades on extended pricing war

Chainarong Prasertthai/iStock via Getty ImagesRocket Companies (RKT) falls 4.7% after Jefferies analyst Ryan Carr downgrades the stock to Hold on the basis of an extended wholesale and retail pricing war, which is contracting margins.Reduces price target to $18/share, reflecting margin contraction impacting gain-on-sale revenue, according to the report.Carr also comments on another mortgage lender, PennyMac Financial Services ([[PFSI]] -0.4%), saying it's well-positioned given the business is 73% correspondent and more tied to volumes.Jefferies proprietary survey of mortgage loan brokers indicates that wholesale pricing remains low, as lenders aggressively pursue market share via price competition.It also forecasts healthy volumes amid an extended period of wholesale/retail margin pressure.Q2 conference calls will serve as the next catalyst for the price war, Jefferies said in the note.Rocket Companies' Hold rating agrees with the Neutral Wall St. average rating (3 Very Bullish, 10 Neutral, 2 Bearish).PennyMac's Buy rating diverges from the Bearish quant rating and agrees with the Bullish

For further details see:

Rocket stock drops after to Jefferies downgrades on extended pricing war