BTIG lowered its rating on UWM Holdings to Neutral from Buy, citing uncertainty over interest rates and the burden of the company’s preferred shares. The firm said those issues could limit the stock’s upside even though it still sees long-term earnings strength.
The analyst also identified near-term pressure on UWM’s market share from Rocket, which carries the same Neutral rating.
Reaching cash-flow neutrality in the current rate environment depends on selling mortgage servicing rights, but those sales remain uncertain because UWM has a higher-coupon servicing mix. BTIG said limited visibility into earnings and cash flow could extend the preferred repayment timeline and increase potential dilution for common shareholders.
The Neutral view differs from the Strong Sell Quant rating and the average Wall Street rating of Buy.