The investment bank slashed its price target on CRCL by 64% ahead of Q2 earnings, citing slowing USDC adoption and weaker reserve income.
Morgan Stanley downgraded Circle to Underweight and reduced its price target to $38 from $106, marking Wall Street’s most bearish call on the stablecoin issuer. The move comes two days before Circle’s second-quarter earnings report and reflects concerns over slowing USDC adoption and weaker reserve income prospects.
Prior to this downgrade, Bernstein had cut its price target on Circle by 25% to $140 on July 30, citing a decline in USDC supply to $73 billion from $77 billion in the first quarter. Bernstein also lowered its long-term USDC supply forecast to $170 billion by 2028 from $290 billion, though it maintained an Outperform rating.
Circle shares fell following the downgrade, extending a recent sell-off despite regulatory progress, including a new trust charter from New York’s financial regulator.