Summary
- Citigroup announced that it has assigned a Buy and High Risk rating to Circle, along with a target price of $243.
- Citigroup stated that Circle could serve as a catalyst for the adoption of stablecoins, and has significant potential and the possibility to realize excess returns.
- On the other hand, JP Morgan pointed out the competition among stablecoin issuers as a risk factor, and lowered Circle's target price to $80 by the end of next year.
Citigroup has assigned a 'Buy' and 'High Risk' rating to Circle, the issuer of the dollar-backed stablecoin USDC, and set a target price of $243. This is 34% higher than the previous day's closing price of $181.
According to CoinDesk on the 1st (local time), Citigroup stated in its report, "Circle could serve as a catalyst for stablecoin adoption," adding, "Along with a buy and high risk rating, we are setting a target price of $243."
Furthermore, it explained, "Circle has significant potential due to its scarcity value, winner-takes-all structure, large potential market, and the momentum from stablecoin regulation," and "Although the stock price has risen significantly since its listing, it is not excessive." In addition, it was added, "Circle can realize considerable excess returns due to high operating leverage and low capital intensity."
However, JP Morgan has previously expressed a negative opinion about Circle. In its report, JP Morgan said, "Competition among stablecoin issuers is a potential risk factor for Circle," and added, "We recommend underweight, setting Circle's target price at $80 by the end of next year."
Son Min
sonmin@bloomingbit.ioHello I’m Son Min, a journalist at BloomingBit
