Morgan Stanley Slashes Circle Target Price Amid Contraction Concerns

Circle Internet Group (CRCL) is facing a ratings downgrade from investment bank Morgan Stanley (MS), with analyst James Faucette lowering his target price to $38 from $106.

Faucette's team believes that USD coin contraction exposes Circle's reserve income sensitivity and points toward potentially reduced margins, leading to lower earnings estimates for the company.

Morgan Stanley also cut Circle's USDC assumptions by 33% in 2027 and by 44% in 2028, driving earnings estimates below consensus.

Circle is set to report its earnings on August 5, with Wall Street expecting a GAAP EPS of $0.16 on revenue of $713.3 million, representing year-over-year top-line growth of less than 8.5%.