Coinbase shares hit a 3-year low. Morgan Stanley has a disagreement with Wall Street over them

Shares of the cryptocurrency exchange Coinbase fell to their lowest level since the winter of 2024 after Morgan Stanley downgraded the stock. The bank now advises investors to sell these shares. Amid uncertainty surrounding cryptocurrencies due to the record-breaking theft following the Binance hack and Coinbase’s weak revenue outlook, Morgan Stanley does not expect the company to deliver outstanding results.

Coinbase shares fell 4% at the close of trading on November 2, and during the day they lost 5.6%, dropping to $135.46—their lowest price since late January–early February 2024. The stock continued its decline after losing 23% in October, Barron’s notes.

Morgan Stanley analysts are now recommending selling the crypto company’s securities: they have downgraded their rating from “Equal Weight” (“in line with the market”) to “Underweight” (“below the market”). The bank also cut its price target by more than half—from $258 to $120—which implies a 13% decline from the latest closing price.

“The recovery in profits has become less predictable. Our initial hypothesis called for a decline in profits in 2026, followed by a sharp recovery in 2027 due to rising cryptocurrency prices, increased activity among retail investors, wider adoption of the company’s products, and the effect of operating leverage,” wrote Morgan Stanley analyst Michael Cypris (as quoted by CNBC). Cryptocurrency trading activity on the Coinbase platform declined in October, putting pressure on the company’s stock, Cypris noted.

Morgan Stanley cut its revenue forecast for Coinbase for 2027 by 28% and its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) estimate for the same period by 47%.

The analyst considers the fallout from the hack of the Binance cryptocurrency exchange—which resulted in the theft of approximately $6 billion in digital assets—to be an additional risk for Coinbase. Although Coinbase was not directly affected by the attack, the incident could undermine investor confidence in centralized cryptocurrency platforms, reduce trading activity, and slow the influx of institutional clients, Morgan Stanley warned.

"Although Coinbase continues to implement its growth strategy, recent trading trends, a weaker revenue outlook, and uncertainty in the cryptocurrency market following the recent Binance hack suggest that the company’s recovery will be weaker than we had previously expected,” Barron’s quotes Cypris as saying.

Morgan Stanley’s recommendation diverges from the prevailing views on Wall Street. According to MarketWatch, of the 41 analysts covering Coinbase stock, 25 recommend buying it (Buy and Overweight ratings), while another 12 recommend holding the stock (Hold). Only three recommend selling (Sell and Underweight).

This article was AI-translated and verified by a human editor