Coinbase has been battered over the past month. Morgan Stanley says steer clear
π Morgan Stanley downgraded Coinbase from equal weight to underweight and lowered the price target to $120 from $258.
πΈ Fourth-quarter transaction revenue through Oct. 25 is estimated at $165 million, roughly 11% below consensus of $685 million.
π Shares have plunged about 22% over the past month amid crypto trading slowdown and competitor hack concerns.
π Morgan Stanley cut its 2027 revenue forecast by 28% and adjusted EBITDA estimate by 47% for Coinbase.
β οΈ A roughly $6 billion hack on rival Binance has created uncertainty about the backdrop for crypto trading affecting Coinbase.
π€ Of 41 analysts covering Coinbase, 26 have buy or strong buy ratings while 13 hold neutral positions.
Bullish Signals
- Despite Morgan Stanley's downgrade, a majority of Wall Street analysts remain bullish on the stock with 26 out of 41 holding buy or strong buy ratings.
- Coinbase continues to execute on its broader strategy despite recent trading trends and softer forward revenue outlook.
Risk Factors
- Morgan Stanley downgraded the crypto exchange to underweight and lowered the price target to $120 from $258, suggesting 16% downside.
- Fourth-quarter transaction revenue through Oct. 25 came in at around $165 million, putting it on track for roughly $607 million, about 11% below consensus.
- Morgan Stanley cut its Coinbase revenue forecast by 28% for 2027 and slashed adjusted EBITDA estimate by 47% for the same period.
- Shares have plunged about 22% over the past month due to weaker trading pace and crypto market uncertainty.
- A massive $6 billion hack on competitor Binance has created uncertainty around the backdrop for crypto, potentially hurting Coinbase's earnings.
Full Analysis
Coinbase Global faces sustained pressure following a downgrade by Morgan Stanley to underweight from equal weight. The investment bank lowered its price target on shares to $120 from $258, citing a massive hack on competitor Binance and a slowdown in crypto trading that challenges the company's recovery thesis.
Analyst Michael Cyprys noted that fourth-quarter transaction revenue through October 25 came in at approximately $165 million, putting full-year estimates around $607 million. This figure is roughly 11% below the consensus forecast of $685 million, driven by weaker trading pace and market uncertainty.
Morgan Stanley has significantly cut its long-term forecasts for Coinbase, reducing the 2027 revenue forecast by 28% and slashing adjusted EBITDA estimates by 47%. Consequently, shares have plunged about 22% over the past month as investors react to the softer forward revenue outlook and broader crypto market headwinds.
Despite Morgan Stanley's bearish stance, the majority of Wall Street analysts maintain a positive view on the stock. Of the 41 analysts covering Coinbase, 26 hold buy or strong buy ratings while 13 hold neutral positions, indicating a divergence between this specific downgrade and broader market consensus.