Morgan Stanley Cuts Circle Price Target to $38 From $106, Downgrades to Underweight
Summary
- Morgan Stanley cut Circle’s price target to $38 from $106 and downgraded its investment rating to underweight.
- Morgan Stanley also sharply lowered its USDC circulation forecast and GAAP earnings per share estimates for 2027 and 2028, citing a decline in USDC circulation and weaker reserve income.
- The bank said tokenized money-market funds and bank deposit products could pressure USDC demand and Circle’s revenue-sharing rate, while USYC and the automated payments business also face a weaker earnings structure.
Forecast Trend Report by Period
Morgan Stanley cut its price target on stablecoin issuer Circle to $38 from $106 and downgraded the stock to underweight from equal-weight.
Crypto-focused media outlet BlockBeats reported on Aug. 3 that Morgan Stanley analyst James Faucette wrote that a decline in USDC circulation could significantly weaken Circle’s reserve income.
He also said Circle’s business mix is shifting away from reserve interest income toward transaction fees, which carry lower profitability.
Morgan Stanley lowered its USDC circulation forecast by about 33% for 2027 and about 44% for 2028. It also projected GAAP earnings per share at roughly 3% and 20% below market expectations for those years.
The bank said tokenized money-market funds and bank deposit products could pressure USDC demand and Circle’s revenue-sharing rate. It also viewed Circle’s tokenized Treasury product, USYC, as having a relatively weaker earnings structure.
Faucette added that Circle’s automated payments business remains small, with related daily transaction volume falling to about $41,900.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.