J.P. Morgan Chase Lowers Coinbase (COIN) Price Target Significantly to $290, But Still Sees 75% Upside Potential

BlockBeats News, February 11th, JPMorgan analyst Ken Worthington lowered his price target for Coinbase stock from $399 to $290 ahead of Coinbase's fourth-quarter earnings report scheduled for this Thursday.

Worthington stated that he remains bullish on the stock, and the revised target price still implies a 75% upside from Coinbase's current $165.5 stock price. He expects the adjusted EBITDA to be $7.34 billion, lower than the third quarter's $8.01 billion. He noted that this would mark a sharp decline from previous quarters, driven primarily by decreased trading volume, weakening cryptocurrency prices, and a slowdown in USDC stablecoin balance growth.

Worthington expects this quarter's spot cryptocurrency trading volume to be $2630 billion. He also highlighted a decrease in circulating USDC and predicted stablecoin-related revenue to be $3.12 billion. These adverse factors are partially offset by the revenue from Deribit, the cryptocurrency derivatives exchange acquired by Coinbase in August last year, contributing to the entire quarter's income.

Including Deribit, JPMorgan's model predicts total trading revenue to be $10.6 billion, with Deribit contributing around $1.17 billion from an estimated trading volume of about $586 billion. In the previous quarter, the trading platform reported revenue of $10 billion.

In terms of subscription and service revenue, the bank expects revenue to be $6.7 billion, lower than Coinbase's previous guidance range of $7.1 billion to $7.9 billion, reflecting crypto price weakness, declining staking yields, and slower USDC growth. Worthington also anticipates that operating expenses will be below guidance due to cost controls at the company.