Coinbase Rally May be a Selling Opportunity, Says Bank of America
The Coinbase (COIN) consensus revenue outlook for this year is still too rosy, says Bank of America’s Jason Kupferberg, downgrading the stock to underperform from neutral and cutting his price target to $35 from $50.
Kupferberg’s downgrade comes after COIN’s near-30% rally to start 2023, and has helped send the shares lower by 3.6% premarket to $41.68.
The stock’s gain this year comes after a decline of more than 80% in 2022. Helping out are about a 5% bounce in the price of bitcoin (BTC) and the company yesterday announcing its intention to reduce headcount by about 20% as part of a restructuring in response to the ongoing crypto winter.
Though management’s moves are “encouraging” and “nimble,” said Kupferberg, his team is cutting its revenue forecast for 2023 even further below Street consensus after its analysis of fourth quarter crypto transaction volume data and a “murky at best” outlook for this year.
Given the “volatile crypto environment”, he said, it will be challenging for the shares to take a significant downward revision to consensus estimates.
Read more: Jefferies Initiates Coverage of Crypto Exchange Coinbase With ‘Hold’ Rating on Near-Term Concerns