04:54 PM EDT, 10/10/2025 (MT Newswires) -- US mortgage companies are poised to report mixed third-quarter results, while a drop in interest rates last month likely drove refinancing activity higher as the September period closed out, UBS Securities said in a note e-mailed Friday.

The brokerage forecasts better-than-expected bottom-line results for PennyMac Financial Services ( PFSI ) and loanDepot (LDI), while expecting an in-line print for Rocket (RKT) and UWM Holdings ( UWMC ) . PennyMac Mortgage Investment Trust ( PMT ) is seen missing Wall Street's earnings views for the third quarter, according to the note.

UBS projects origination volume to have gained 4%, compared with industry expectations of a 1% drop sequentially.

"Servicing profitability is likely to remain strong, although weaker seasonally, and the key source of industry profitability in the third quarter," UBS analyst Doug Harter said in a note to clients.

UBS raised its price targets on the covered stocks by a median of 14% to factor in a drop in mortgage rates last month and subsequent uptick in refinancing activity.

The average 30-year fixed rate in the US fell to 6.26% as of Sept. 18 from 6.50% two weeks ago, Freddie Mac data showed.

"The September pickup in refi applications could cause some volume to close in (the fourth quarter) so we think lock volume will be a better indicator of the size of the current refi opportunity," Harter said. "Looking forward to (the fourth quarter), we are forecasting 9% higher sequential volumes as the drop in rates in September should lead to increased applications/locks in (the third quarter) that will likely come through in funded volume in (the fourth quarter)."

The brokerage assumes that mortgage rates will drop by 10 to 30 basis points over the next 12 months.