Wells Fargo was active this morning, as the company's analysts issued timely upgrades to three stocks. They upgraded Moody's (MCO) to a "Strong Buy" and did the same for shares of Fair Isaac (FICO). Finally, Equifax (EFX) saw its rating increase from "Buy" to "Strong Buy."
These upgrades collectively signal Wells Fargo's expectation of a boom in the housing market as soon as the Federal Reserve begins lowering interest rates.
Our "Fast Money" profile on Rocket Companies (RKT) echoes this bullish outlook for the industry. Read it here.
The Federal Reserve is anticipated to cut rates by 0.25% at their upcoming September meeting, a move likely to stimulate the housing sector. All three of Wells Fargo's upgraded companies are set to benefit from a surge in housing activity.
Fair Isaac and Equifax, as consumer credit bureaus, stand to benefit from a surge in mortgage loan applications as rates begin to drop.
Moody’s, operating in the debt markets as a rating agency, evaluates the creditworthiness of corporate and government bonds, among other securities. A rise in mortgage lending is expected to increase activity in the bond market, as banks seek to underwrite new mortgage loans backed by bond sales—again, a positive development for Moody’s bottom line.
Moody's shares remain bullish with a price target of $510.
Fair Issacs shares are bullish with a price target of $2,000
Equifax shares are bullish with a price target of $340.
