Morgan Stanley Cuts Coinbase (COIN) Price Target 53% to $120

Morgan Stanley Cuts Its Target to $120

Morgan Stanley downgraded Coinbase Global (COIN) to Underweight on Monday and cut its price target from $258 to $120, a 53% reduction that leaves roughly 16% downside to the stock's Oct 30 close of $143.54. Analyst Michael Cyprys wrote in the note that “confidence in an earnings recovery has weakened,” naming three drivers: fading trading activity, a deteriorating revenue outlook and the uncertainty that followed last week's security breach at Binance. He argued that even as the exchange keeps pushing into more product lines, a slower trading pace and softer revenue prospects could weigh on profits for years.

The revision cuts estimates and valuation at the same time. Morgan Stanley lowered its 2027 revenue forecast by 28% and its 2027 adjusted EBITDA estimate by 47%, then trimmed 2028 revenue by 18% and 2028 EBITDA by 25%. The multiple it applies to EBITDA drops from 20x to 12x. Together, the bank now models about $2.4 billion in normalized 2028 EBITDA, still roughly 14% below the 2025 level, a picture of a muted recovery rather than a return to the last cycle's peak. That twin cut to estimates and multiple is what collapsed the target from $258 in one step.

The call lands on a slide already under way. Shares fell as much as 2.3% to $140.25 in Monday trading after a week in which the stock lost about 10%; over twelve months it is down roughly 58% and sits near its 52-week low of $136.89. Morgan Stanley itself raised its target from $250 to $258 only three weeks ago while keeping a neutral rating. Barclays already carried the same Underweight rating and $120 target, so Monday's move joined an existing cut wave among brokers rather than starting one.

Q3 Report and a Divided Street

The downgrade rests on weak numbers. In its third-quarter earnings release, published on Oct 29, Coinbase reported total revenue of $1.22 billion, down 35% year on year and roughly flat with the prior quarter. Trading revenue fell 44% to about $590 million, while subscription and services revenue slipped 20% to $570 million. Overall crypto trading volume declined 10% from the second quarter as price volatility dropped to multi-year lows, squeezing the fee income at the core of the exchange's model. The release also pointed to two growth pockets: Coinbase One subscribers hit an all-time high and prediction markets crossed $200 million in annualized revenue.

The fourth quarter has started slowly. Through Oct 25, disclosed trading revenue stood near $165 million, and Morgan Stanley calculates that if that pace held, quarterly trading revenue would land around $607 million, about 11% below the $685 million consensus. The company cautioned that early-quarter figures should not be extrapolated, since volumes can still shift in the remaining weeks. Guidance calls for $550 million to $630 million in Q4 subscription and services revenue, with adjusted expenses of $1.01 billion to $1.16 billion, above Q3's $975 million, and full-year adjusted expenses cut to $4.15 billion to $4.3 billion.

The Street is not aligned. Q3 adjusted EBITDA of $333 million beat expectations, and most brokers kept constructive ratings: Goldman Sachs stays at Buy with a $210 target, BTIG kept $240 on the view that security worries could push users toward regulated venues, and Canaccord and H.C. Wainwright set targets between $230 and $280. Of 41 covering analysts, 26 rate the stock Buy or Strong Buy and 13 hold. Cyprys did fold the Binance breach into his note, arguing the roughly $6.3 billion incident did not touch Coinbase directly but deepened industry uncertainty and suppressed the volumes that spot-fee platforms depend on most.

Support Sits at $137.95

The tape matches the bear case more than the buy ratings do. COINOTAG data shows COIN at $140.57, down 4.21% on the day and near the lower end of a 24-hour range of $138.97 to $147.93, with the daily RSI at 25.8 and a bearish MACD inside a downtrend. The strongest support in COINOTAG's composite sits at $137.95, scored 76 out of 100; the first meaningful resistance is $152.97, scored 86 out of 100, the level the stock would need to reclaim to challenge the downgrade thesis. Derivatives positioning stays modest, with open interest in perpetual futures near $27.1 million and funding at 0.0178% per interval. Until trading volumes pick up, the 76/100 floor at $137.95 is the line that keeps the bear case from extending.