Morgan Stanley Downgrades Circle to $38 Target Amid Stablecoin Concerns
Circle Internet Group's stock has seen a downgrade from Morgan Stanley to $38 target while TD Cowen rates it a Buy with an $82 target.
Morgan Stanley analyst, Faucette, downgraded Circle due to his reduced USDC supply assumptions for 2027 and 2028, which put his GAAP EPS estimates 3% and 20% below consensus. He also stated that stablecoin activity remains skewed towards crypto trading and transfers rather than real payments.
Faucette cited McKinsey data estimating $35 trillion in adjusted stablecoin volume, with only $390 billion representing identifiable payments, around 0.5% of total activity. He noted the growing use cases for cross-border B2B and consumer remittances but expressed concerns that they have not demonstrated durable balances or recurring transaction economics to offset pressure on Circle's reserve-income model.
In contrast, TD Cowen analyst, Bryan Bergin, initiated coverage with an $82 price target, implying 31% upside from Friday's close. He highlighted the market underestimating Circle's evolution into a platform player spanning payments, treasury, tokenized real-world assets, interoperability, and developer services.