Coinbase Upgraded As Both Presidential Candidates Show Crypto Support; Analyst Sees Resilience Amid Regulatory Changes
Barclays analyst Benjamin Budish has upgraded Coinbase Global, Inc. (NASDAQ: COIN) from Underweight to Equal-Weight, while adjusting the price target from $206 to $169.
Budish highlights positive developments in the regulatory environment, including increased support for cryptocurrency from presidential candidates and the approval of several spot crypto ETFs.
This favorable environment has supported Coinbase’s revenue stability. However, Barclays analyst Benjamin Budish also notes ongoing risks, including fee compression in the retail sector and profitability challenges due to lower interest rates and reduced USDC rewards.
Additionally, Budish acknowledges the improving regulatory landscape, a stronger profit and loss outlook—particularly in cost management—and Coinbase's continued diversification into areas like futures, base fees, custody revenues, and Coinbase One. These factors, coupled with Coinbase's strong leadership position in the U.S. market, suggest a more balanced risk/reward profile.
Despite the company's recent stock performance—down 35% compared to a 3% gain in the S&P 500 over the past three months—the overall outlook is becoming more favorable, according to Budish.
Coinbase had previously expanded its workforce to handle higher volumes but also saw significant increases in Technology, Development, and G&A expenses. This rapid rise in spending led to inefficiencies, especially as activity levels declined from their peak.
The analyst has updated Coinbase’s model to reflect current trends, such as lower crypto asset prices and a flatter Fed funds futures curve.
This revision adjusts near-term volume growth expectations, reflecting stable overall exchange volumes and modest anticipated growth, according to Budish.
The analyst has revised the FY24 adjusted EPS estimate to $6.91, down from $7.15, and reduced the FY25 adjusted EPS estimate from $6.26 to $5.11.
Price Action: COIN shares are currently down 7.4%, trading at $147.85 as of the latest update on Friday.
Photo by rafapress on Shutterstock
See Also:
- El Salvador President Nayib Bukele Says Bitcoin Adoption Hasn’t Been a ‘Resounding Success’ — ‘We Have Never Forced Anyone to Adopt It’
Latest Ratings for COIN:
- Mar 2022: Goldman Sachs - Maintains Buy
- Feb 2022: Compass Point - Maintains Neutral
- Feb 2022: Canaccord Genuity - Maintains Buy
View More Analyst Ratings for COIN
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