Morgan Stanley Sees Greater Downside Risk for Coinbase Shares

Funding financial institution Morgan Stanley turned bearish on Coinbase (COIN) on Monday, chopping its worth goal by greater than half because it warned that the cryptocurrency trade’s earnings might get well extra slowly than anticipated.

Analyst Michael Cyprys lowered the inventory’s worth goal from $258 to $120, a lower of about 53%, citing current buying and selling developments, a softer income outlook and uncertainty within the crypto market following Binance’s $6.3 billion hack, in accordance with a Monday report.

The financial institution nonetheless sees Coinbase as one of many strongest rivals in crypto however expects earnings to get well extra slowly than beforehand forecast, placing additional strain on its share worth.

The downgrade comes days after Coinbase reported a roughly 34% year-over-year decline in third-quarter web income to $1.16 billion on Oct. 29. The trade posted $719 million in web revenue, largely pushed by good points on cryptocurrency investments, whereas adjusted web revenue was $78 million.

The corporate’s earnings sparked a selloff in crypto-linked stocks on Friday, with its shares falling greater than 13% in noon buying and selling amid the fallout from the Binance hack. Circle shares declined greater than 9%, whereas Technique fell about 8%.

Coinbase shares prolonged their losses on Monday, dropping greater than 3.3% to $138 on the time of writing, in accordance with Yahoo Finance information.