Morgan Stanley Slashes Circle Internet Price Target to $38

Morgan Stanley downgraded Circle Internet (CRCL) to underweight from equal-weight, citing a weaker long-term earnings outlook. The bank cut its price target to $38 from $106.

The move sent Circle's stock sliding 6% on Monday. The company has fallen about 30% year-to-date, reflecting growing investor concern over the outlook for USDC, the dollar-backed stablecoin and largest source of revenue.

Analyst James Faucette said Morgan Stanley expects slower $USDC growth as reserve income comes under pressure and Circle shifts toward lower-margin transaction revenue. The bank reduced its $USDC supply forecasts by roughly 33% for 2027 and 44% for 2028, resulting in GAAP earnings-per-share estimates that are about 3% below Wall Street consensus in 2027 and 20% below consensus in 2028.