JPMorgan Analyst Richard Shane lowered the ratings of Rocket Companies (RKT) to Neutral from Overweight, with price target reduced to $8.50 from $11.00.
The agency also cut ratings on Discover Financial Services (DFS) and Enact Holdings (ACT) to Neutral from Overweight. The price target on DFS was reduced to $113 from $140, but the price target on ACT was maintained at $27.
The analyst is taking an "incrementally more cautious" view on U.S. consumer finance stocks, according to a note containing the ratings downgrade.
The Neutral rating on Rocket Companies considers the impact of higher expected mortgage rates on home origination volumes.
For DFS, the agency believes credit quality and loan growth remain solid. However, an internal investigation likely limits opportunity for meaningful multiple expansion and relative performance.
Enact was downgraded on more attractive relative valuation opportunities with the other private mortgage insurance companies.
The average price target for the stocks according to the sell-side analysts is $9.06.
The sell-side analysts give ACT shares a Buy rating an on average, with a price target of $26.71.
RKT shares were falling ~6%, DFS ~4% and ACT ~2% after the report.