Key Insights
- The continued weakness in Bitcoin has led to the decision to cut targets.
- Mizuho analysts revised down price targets for MSTR and COIN to $320 and $170, respectively.
- Investment analysts remain cautiously optimistic about Coinbase, citing its diversified revenue.
Analysts at financial services firm Mizuho Securities have cut their price targets for Coinbase and Strategy. The move followed a recent decline in Bitcoin value.
Bitcoin has struggled to hold above $70,000 since it fell below that level in early February. It has failed to stage a quick recovery. Hopes for a rebound are now fading.
Coinbase Target Reduced to $170 With Strategy Cut to $320
The recent move by the investment firm highlights their cautious outlook on the crypto sector, at least in the short term. According to the analysts, Strategy’s MSTR price target is revised to $320 from $403, a 20.6% decline.
Coinbase’s COIN price target has also been revised by 39.3%, from $280 to $170. This suggested a much bearish sentiment around the stock.
Meanwhile, Mizuho is not the first investment firm to revise price targets for crypto stocks. Benchmark’s Mark Palmer had also cut his price target for COIN to $267 from $467. Palmer noted that the market conditions warranted this revision.
Other investment firms, such as Canaccord, revised their targets from $400 to $300. At the same time, Piper Sandler reduced its target from $270 to $150. JPMorgan also lowered its target from $290 to $252, and Needham reduced its target to $230.
Interestingly, the stocks are already trading below their revised level. COIN is currently trading at $164.32, down 34% over the past month. MSTR is even further below its target, trading at $133.88.
The Bitcoin treasury company’s stock has lost 22% in the past month, compounding the 65% drop over the past six months. That has not stopped it from continuing its Bitcoin accumulation.
Strategy recently announced that it bought an additional 2,486 Bitcoin for $168.4 billion at $67,710 per BTC. The company now holds 717,131 BTC, which it bought for $54.52 billion. However, it is sitting on unrealized losses, with an average cost per BTC of $76,027.
Analysts Maintain Buy Rating for COIN Despite Revision
Despite the recent price revisions, the general sentiment around MSTR and COIN stocks might still be cautiously optimistic. This is evident in the revised MSTR and COIN targets, which remain well above their current prices.
With those targets, there is an implicit suggestion that these stocks might be a cheap buy at present. This is at least very evident with Palmer’s revision, as the Benchmark analyst maintained his Buy rating for COIN.
According to the analyst, Coinbase’s below-expectations performance in its latest earnings report masked positive developments. These positives include the jump in institutional transaction revenue and stablecoin revenue, both up 37% and 3% respectively.
Additionally, subscription and service revenue accounted for 43% of its net revenue in Q4, up 23% year-on-year. All these suggest that the exchange still has strong fundamentals, despite current crypto prices, thanks to its diversification.
Palmer’s opinion aligns with that of Bernstein, which maintained its $440 target for COIN stock and its Overperform rating. The investment firm believes that COIN is too cheap at its current price to sell.
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