Morgan Stanley Sees Coinbase with Room for Over 40% Upside

Morgan Stanley's analysts have taken a cautious stance on Coinbase, despite initiating coverage with an equal weight rating and a price target of $250. This implies over 40% upside from current levels, but analyst Michael Cyprys notes that the wide range of potential outcomes justifies a neutral stance.

Cyprys believes that Coinbase has evolved significantly since its early days as a Bitcoin-only exchange, now spanning retail and institutional trading, custody, stablecoins, derivatives, staking, payments, and onchain infrastructure. The platform ended the second quarter with 7.6 million monthly transacting users and $246 billion of assets on the platform.

However, Cyprys also notes that retail crypto trading remains a key swing factor for Coinbase, accounting for about 40% of revenue. He forecasts a cyclical reset in 2026, a sharp rebound in 2027, and normalization in 2028, when he expects about $3.0 billion of adjusted EBITDA.

The analyst believes that regulatory clarity, the company's push into assets such as equities and prediction markets, and its stablecoin and Base infrastructure all expand Coinbase's addressable market, but also invite more competition and gradual pricing pressure.