UWM Holdings cut to Neutral at BTIG as interest rates and preferred stock overhang

U.S. Bancorp's BTIG downgraded mortgage wholesaler UWM Holdings (UWMC) to Neutral from Buy on Monday, as the uncertainty over rates and the overhang of the company's preferred shares limit the stock's upside.

Analyst Douglas Harter still has faith in the company's long-term earnings power, but in the near term he sees downside risk to its market share as a result of increased pressure from Rocket (RKT), which the BTIG also rates as Neutral.

The note focused on UWMC's ability to repay its preferred. The company used $780M of cash in Q2, larger than the $650M average per quarter consumed throughout 2025. "Getting to cash-flow neutral in the current rate environment continues to rely on MSR (mortgage servicing rights) sales, which are uncertain given UWMC’s higher coupon servicing mix," the analyst said.

"Until visibility into earnings and cash flow improves, there remains a risk of a longer repayment timeline and greater dilution to common shareholders from the preferred," Harter wrote.

BTIG's Neutral rating contrasts with the SA Quant rating of Strong Sell and the average Wall Street rating of Buy.

UWM Holdings (UWMC) stock rose 0.9% in premarket trading.

Recommended For You

Create Your Free Account to Keep Reading

Get the confidence to navigate an uncertain market with free breaking news and stock alerts.