TLDR
- Morgan Stanley cut Coinbase to Underweight from Equalweight.
- Its price target dropped to $120 from $258, a cut of about 53%.
- The stock trades near $138, just above its 52-week low of $136.89.
- The bank lowered 2027 and 2028 revenue and EBITDA forecasts.
- Q3 net revenue fell 34% to $1.16 billion, while adjusted EBITDA beat estimates.
Coinbase (COIN) stock slipped about 4% on Monday and traded near $138 after Morgan Stanley cut its rating. That puts it just above its 52-week low of $136.89.
Morgan Stanley moved the stock to Underweight from Equalweight. It also lowered its price target to $120 from $258, a cut of about 53%.
The stock has dropped 58% over the past year. It traded at $143.54 early Monday before sliding further.
Why Morgan Stanley Turned Bearish
Analyst Michael Cyprys pointed to recent trading trends and a softer revenue outlook. He also cited uncertainty in crypto after Binance’s $6.3 billion hack.
The bank still sees Coinbase as one of the strongest competitors in crypto. It expects profits to recover more slowly than it first thought.
Morgan Stanley cut its 2027 and 2028 revenue forecasts by 28% and 18%. Adjusted EBITDA estimates fell 47% and 25% for the same years.
Its new 2028 EBITDA estimate is $2.4 billion. That sits 14% below 2025 levels.
The firm also lowered its target EBITDA multiple to 12 times from 20 times. It noted that past rough stretches pushed valuations toward 10 times.
The original call expected a 2026 earnings reset and a sharp rebound in 2027. That rebound relied on higher crypto prices, more retail activity, wider product adoption and operating leverage.
Earnings and Other Analyst Moves
The downgrade came days after Coinbase reported Q3 results on Oct. 29. Net revenue fell about 34% from a year earlier to $1.16 billion.
Net income was $719 million, mostly from gains on crypto investments. Adjusted net income was $78 million, and adjusted EBITDA hit $333 million, above consensus.
The report sparked a selloff in crypto-linked stocks on Friday. Coinbase fell more than 13% at midday, Circle dropped over 9% and Strategy slid about 8%.
Citizens kept a Market Outperform rating with a $280 target. H.C. Wainwright held a Buy with a $240 target.
Mizuho lowered its target to $145 and stayed Neutral, pointing to weak trading. Canaccord cut its target to $275 and kept a Buy, citing better profitability on flat revenue.
US Tiger Securities moved its target to $230. It blamed broader market headwinds instead of company issues.
Coinbase stock was down more than 3.3% at $138 on Monday, according to Yahoo Finance data.
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