Morgan Stanley Downgrades Coinbase to Bearish and Halves Price Target

Investment bank Morgan Stanley on Monday downgraded Coinbase (COIN) to a bearish rating, cutting the target price by more than half – from $258 to $120, approximately 53%. Analyst Michael Cyprys cited recent trading trends, a softer revenue forecast, and uncertainty in the cryptocurrency market following the $6.3 billion Binance hack. The bank still considers Coinbase one of the strongest competitors in cryptocurrencies but expects a slower recovery in profits than previously forecasted, which is weighing on the stock.

Report and sell-off

The downgrade followed a few days after Coinbase reported a drop in Q3 net revenue of approximately 34% year-over-year to $1.16 billion on October 29. Net income was $719 million, mainly due to an increase in the value of crypto investments; adjusted net income was $78 million. Following the report, a sell-off of cryptocurrency stocks began on Friday: Coinbase shares fell more than 13% in midday trading amid the aftermath of the Binance hack. Circle shares declined more than 9%, Strategy by approximately 8%. On Monday, Coinbase continued to decline: at the time of publication, the stock was priced at $138, losing more than 3.3%, according to Yahoo Finance.