Gordon Haskett Capital Corporation analyst Robert Mollins upgraded the rating on Redfin (RDFN – Research Report) to a Hold today, setting a price target of $10.00.
Robert Mollins has given his Hold rating due to a combination of factors surrounding the acquisition of Redfin by Rocket Companies. The deal, which is an all-stock transaction, offers a significant premium over Redfin’s previous closing price, suggesting that the acquisition is beneficial for Redfin shareholders. However, the transaction’s completion is not expected until the second or third quarter of 2025, pending shareholder approval and other conditions, which introduces a level of uncertainty.
Additionally, while Rocket Companies anticipates strategic and financial benefits from the acquisition, including increased customer introduction to their ecosystem and significant revenue and cost synergies, these benefits are projected to materialize over the next few years. The anticipated synergies and the potential impact on earnings per share are positive, yet the market’s reaction, including a drop in Rocket’s share price, reflects some skepticism. Therefore, the Hold rating reflects a balanced view of the potential benefits and the inherent risks and uncertainties of the transaction.
In another report released on March 2, J.P. Morgan also maintained a Hold rating on the stock with a $7.00 price target.