Morgan Stanley has turned more cautious on Coinbase, downgrading the stock to Underweight from Equalweight and slashing its price target by roughly 53% to $120 from $258. Analyst Michael Cyprys pointed to weaker trading activity, slowing earnings growth, and uncertainty in crypto after Binance’s $6.3 billion hack as key reasons for the more bearish stance.
The bank lowered its 2027 revenue estimate by 28% and its 2028 forecast by 18%. Adjusted EBITDA projections were also cut by 47% for 2027 and 25% for 2028. Morgan Stanley’s new 2028 EBITDA estimate is $2.4 billion, about 14% below 2025 levels. The firm reduced its target EBITDA multiple to 12 times from 20 times, noting that past rough stretches pushed valuations toward 10 times.
The downgrade followed Coinbase’s third-quarter results on Oct. 29. Coinbase reported $1.22 billion in quarterly revenue, about 6% below Morgan Stanley’s estimate. Net revenue fell about 34% year over year to $1.16 billion. Transaction revenue took the biggest hit, declining 44% from a year earlier to $590.2 million, while subscription and services revenue dropped 20% to $570.2 million. Net income was $719 million, mostly from gains on crypto investments, while adjusted net income was $78 million. Adjusted EBITDA reached $333 million, above consensus estimates.
Coinbase stock slipped about 4% on Monday and traded near $138, just above its 52-week low of $136.89. The stock has dropped about 58% over the past year. The Q3 report also triggered a selloff in crypto-linked stocks, with Coinbase falling more than 13% at midday Friday, Circle dropping over 9%, and Strategy sliding about 8%.
Other analysts remain split. 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, Canaccord cut its target to $275 and kept a Buy, and US Tiger Securities moved its target to $230, blaming broader market headwinds rather than company-specific issues.
