Morgan Stanley has turned bearish on Coinbase, cutting its price target for the cryptocurrency exchange by about 53%, from $258 to $120. Analyst Michael Cyprys said the company’s profits may recover more slowly than previously expected, according to a Monday report.
The investment bank cited slowing trading activity, a weaker revenue outlook and uncertainty across the crypto market following the $6.3 billion hack involving Binance. Morgan Stanley still considers Coinbase one of the sector’s strongest competitors, but expects a slower earnings recovery than its earlier forecasts indicated.
The downgrade follows Coinbase’s third-quarter results, released on Oct. 29. The exchange reported net revenue of $1.16 billion, a roughly 34% decline from the same period a year earlier. Net income reached $719 million, largely due to gains on cryptocurrency investments, while adjusted net income stood at $78 million.
Coinbase’s results contributed to a selloff in crypto-related stocks on Friday. Its shares fell more than 13% in midday trading, while Circle declined more than 9% and Strategy dropped about 8%. Coinbase shares continued lower on Monday, falling more than 3.3% to $138 at the time of writing, according to Yahoo Finance data.
Sources: Cointelegraph.