Morgan Stanley Slashes Price Target on Circle to $38

Morgan Stanley has downgraded Circle Internet Group to Underweight from Equal Weight and slashed its price target to $38 from $106. The brokerage cited slower stablecoin growth and pressure on reserve income as reasons for the downgrade.

The move comes days after Circle secured a New York trust charter, and ahead of its second quarter earnings report.

Morgan Stanley lowered its USDC circulation forecasts by 33% for 2027 and 44% for 2028, arguing that the stablecoin has not expanded as quickly as previously expected.

The brokerage 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.