Morgan Stanley's downgrade of Coinbase Global reflects growing concerns about the company's future amid a challenging crypto market. Analyst Michael Cyprys noted that the recent hack on Binance, which resulted in losses of approximately $6 billion, could further dampen trading activity and investor confidence in the sector.
The bank has reduced its price target for Coinbase shares from $258 to $120, indicating a potential 16% decline from the stock's recent closing price. Cyprys highlighted that October's trading revenue was around $165 million, falling short of the consensus estimate of $685 million for the quarter, which suggests a weaker outlook for the company's earnings recovery.
Additionally, Morgan Stanley has cut its revenue forecast for Coinbase by 28% for 2027 and adjusted its EBITDA estimate down by 47%. This pessimistic view contrasts with the broader market sentiment, as 26 out of 41 analysts still maintain a buy or strong buy rating on the stock.
Overall, the combination of declining trading volumes and increased market uncertainty poses significant risks for Coinbase's financial performance moving forward