Rocket Companies (RKT) faces near-term revenue pressure from higher interest rates, though its progress on cost synergies is improving its outlook, Oppenheimer said in a Friday research report.

The investment firm said in a Friday research report that Q3 revenue is expected to come in about 10% below the Street estimate. It said higher rates weighed on purchase and refinance activity during the quarter. It lowered its 2026 and 2027 revenue estimates by 5% and 9%, respectively.

The company is making progress in meeting its synergy targets. The brokerage anticipates $400 million of annual run-rate cost savings to be completed by year-end and another $100 million expected in the first half of 2027, according to the note.

Oppenheimer said it views Q2 and Q3 adjusted net income could represent a floor for earnings, with any improvement in interest rates providing incremental high-margin revenue.

Rocket has created a strong top of funnel and competitive moat through its acquisitions of Redfin and Mr. Cooper. The acquisitions are expected to drive revenue synergies and share gains over the long term, the note added.

Oppenheimer reiterated its outperform rating and price target of $20 per share on the stock.

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