Morgan Stanley Slashes Circle Price Target to $38 Amid USDC Slowdown

Morgan Stanley downgraded Circle to Underweight and reduced its price target from $106 to $38, citing slower stablecoin growth and pressure on reserve income.

The brokerage lowered its USDC circulation forecasts for 2027 and 2028 by about 33% and 44%, respectively. Morgan Stanley also questioned Circle's long-term growth target, saying USDC has 'effectively not grown' since the third quarter of last year despite management's objective of averaging 40% annual growth across market cycles.

Circle shares fell about 6% in premarket trading after the downgrade, while TD Cowen initiated coverage with a Buy rating and an $82 price target. The other Wall Street firm described Circle as a way for investors to gain exposure to institutional adoption of stablecoins and the modernization of financial infrastructure.