Feb. 2 at 8:28 PM
Morgan Stanley initiated coverage of Circle with an Equal-weight rating and a
$66 price target, saying investors are unlikely to assign a higher valuation until stablecoin adoption broadens and revenue diversifies beyond crypto-related use cases. While the bank views Circle as well positioned among stablecoin issuers due to its regulatory focus and reserve structure, it believes near-term risks outweigh upside potential.
Key risks cited include regulatory uncertainty in the U.S., a sluggish crypto market, and sensitivity to interest rates, which directly affect Circle’s interest-based revenue. Morgan Stanley added that delays around the CLARITY Act are a negative, as lawmakers continue debating whether stablecoin issuers should be allowed to pass yields to holders, an issue facing pushback from traditional banks.
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