Investment bank Morgan Stanley turned bearish on Coinbase (COIN) on Monday, cutting its price target by more than half as it warned that the cryptocurrency exchanges profits could recover more slowly than expected.
Analyst Michael Cyprys lowered the stock‘s price target from $258 to $120, a cut of about 53%, citing recent trading trends, a softer revenue outlook and uncertainty in the crypto market following Binance’s $6.3 billion hack, according to a Monday report.
The bank still sees Coinbase as one of the strongest competitors in crypto but expects profits to recover more slowly than previously forecast, putting further pressure on its share price.
The downgrade comes days after Coinbase reported a roughly 34% year-over-year decline in third-quarter net revenue to $1.16 billion on Oct. 29. The exchange posted $719 million in net income, largely driven by gains on cryptocurrency investments, while adjusted net income was $78 million.
The companys earnings sparked a selloff in crypto-linked stocks on Friday, with its shares falling more than 13% in midday trading amid the fallout from the Binance hack. Circle shares declined more than 9%, while Strategy fell about 8%.
Coinbase shares extended their losses on Monday, dropping more than 3.3% to $138 at the time of writing, according to Yahoo Finance data.
Source: Yahoo Finance
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