Rocket Shares Fall Back to Earth on High Volatility

© Reuters

By Liz Moyer — Rocket Companies Inc (NYSE:) shares tumbled 27% after a wild ride this week, and at least one analyst is throwing up the caution sign.

The consumer lender’s shares have whipsawed over the last few days, reportedly because retail investors are pushing a short squeeze along the lines of the GameStop Corp (NYSE:) and AMC Entertainment Holdings Inc (NYSE:) trades earlier this year. RBC Capital Markets analyst Daniel Perlin cut his rating to sector perform from outperform, with a price target of $30, which he said is already a Street high.

RKT was up ~71% Tuesday and 109% since reporting last week, “which has surpassed our Street-high target price of $30 per share, we are downgrading the stock to Sector Perform from Outperform, as we believe the risk/reward is now more balanced, if not skewed to the downside,”  Perlin said in an overnight note.

Rocket reported positive results for the fourth quarter and full year 2020 and said it would pay shareholders a special $1.11 a share dividend. 

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