RKT Stock Price: Rocket Companies Inc has three reasons to attract buyers as it flies at low orbit
|- NYSE: RKT is set to extend its falls toward the $20 mark, still above the IPO price.
- Rocket Companies Inc.'s relatively low debut price and sliding shares may attract buyers.
- The coronavirus crisis may increase demand for lending provided by Quicken Loans.
A quick rise and a quick fall for the firm behind Quicken Loans? Not so fast. While NYSE: RKT shares have been on the back foot, Rocket Companies has a sound business model that may thrive in coronavirus times for three reasons.
1) No fiscal support: Lawmakers in Washington are dithering around the next fiscal relief package, allowing federal unemployment benefits to lapse. President Donald Trump's executive order – which may be legally challenged – stipulated a top-up of $300/week for the unemployed, only half the previous payment.
2) Low rates: While that poses a risk for debt payments, it also opens the door to further lending in the US – including from Quicken Loans. Interest rates remain depressed thanks to the Federal Reserve's open-ended bond-buying schemes and unequivocal support of the economy
3) Suburban buying: Rocket Companies Inc. also owns Rocket Mortgages – and the housing market remains firm. Those who continue working from home are now seeking larger dwellings and are getting used to staying indoors. Demand for houses outside the large urban areas is rising. The thriving housing market may increase the demand for mortgages.
All in all, the financial services company is well-positioned to take advantage of the current COVID-19 crisis – despite the dim recession prospects.
RKT Stock Forecast
NYSE: RKT is priced at $20.35 at the time of writing, another minor decline after Tuesday's fall of 5%. Shares are now well below the peak of $26.85 hit shortly after the IPO but above the launch price of $18.
Support awaits at the psychologically significant $20 level, followed closely by $19.50, which held it down before the surge. Immediate resistance is at the stubborn cap of $21.15, followed by $23.
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