Morgan Stanley Slashes Circle Price Target by 64%, Citing Slowing USDC Adoption

Morgan Stanley has turned bearish on Circle's stock, slashing its price target by 64% to $38 from $106. The bank cited slowing USDC adoption and weaker reserve income prospects as reasons for the downgrade.

The investment bank downgraded Circle's shares to 'Underweight' ahead of its earnings report on August 5. Analyst James Faucette pointed out that the stalling growth of USDC could dampen Circle's biggest sources of revenue, particularly in areas beyond remittances and stablecoin-linked card payments.

Morgan Stanley also reduced its forecasts for USDC supply by 33% for 2027 and 44% for 2028. It lowered its earnings estimates, with the 2027 forecast about 3% below Wall Street expectations and its 2028 estimate 20% lower than the general consensus.

Despite Circle's recent regulatory milestones, including a limited-purpose trust charter from the New York Department of Financial Services, investors appeared more focused on slowing growth. Other analysts have also lowered their expectations for Circle, with Bernstein reducing its price target from $190 to $140 and Mizuho downgrading CRCL to underperform.