Morgan Stanley Downgrades Circle to Underweight and Cuts Price Target by 64%
On August 3, Morgan Stanley downgraded stablecoin issuer Circle (NYSE: CRCL) from its previous rating to 'Underweight' and slashed the price target from $106 to $38. The downgrade was attributed to slowing USDC adoption, weaker reserve income prospects, and a higher valuation relative to earnings potential. This move reflects growing caution among Wall Street analysts ahead of Circle's August 5 second-quarter earnings report. Earlier in July, Bernstein also cut its price target for the stock by 25%, citing slower growth in USDC supply as a concern. Despite regulatory progress—such as receiving a limited-purpose trust charter from New York DFS—Circle’s shares have continued to decline, falling nearly 7% after the announcement. While Morgan Stanley's downgrade is among the most bearish on Wall Street, TD Cowen recently initiated coverage with a 'Buy' rating and an $82 price target. Analysts remain divided over Circle's future performance.
