TLDR
- Morgan Stanley cut Coinbase to Underweight from Equalweight.
- Its price target fell 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 trimmed 2027 and 2028 revenue and EBITDA forecasts.
- Q3 net revenue fell 34% to $1.16 billion, while adjusted EBITDA beat estimates.
Coinbase (COIN) stock fell about 4% on Monday after Morgan Stanley cut its rating. It traded near $138, just above its 52-week low of $136.89.
The bank 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 opened the day near $143.54 before sliding.
Analyst Michael Cyprys cited recent trading trends and a softer revenue outlook. He also pointed to uncertainty in crypto after Binanceās $6.3 billion hack.
What Morgan Stanley Changed
The firm 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 is 14% below 2025 levels.
Morgan Stanley also dropped its target EBITDA multiple to 12 times from 20 times. It noted that past tough cycles 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 use and operating leverage.
The bank still calls Coinbase one of the strongest competitors in crypto. It just expects profits to recover more slowly than first thought.
Q3 Results and Other Analysts
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.
Adjusted EBITDA came in at $333 million, above consensus. Citizens pointed to strong expense control and kept a Market Outperform rating with a $280 target.
H.C. Wainwright held a Buy rating with a $240 target. Mizuho cut its target to $145 and stayed Neutral, citing weak trading.
Canaccord lowered its target to $275 and kept a Buy. US Tiger Securities moved its target to $230, blaming broader market headwinds instead of company issues.
The earnings report sparked a crypto-linked selloff on Friday. Coinbase fell more than 13% at midday, Circle dropped over 9% and Strategy slid about 8%.
Coinbase stock was down more than 3.3% at $138 on Monday, according to Yahoo Finance data.
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