JP Morgan Rates Circle As 'Underweight' With $80 Target

JP Morgan analysts have assigned Circle an 'Underweight' rating, citing that the stablecoin issuer's stock is overvalued following its initial public offering. They expressed confidence in Circle's management and the potential for growth in stablecoins and USDC but noted that the current market capitalization is high. The analysts set a price target of $80 per share for the end of 2026, based on a price-to-earnings ratio of 45x, similar to peers like Robinhood. Circle shares were trading at approximately $186.50, having experienced a 25% drop last week. The company's revenue largely depends on assets backing dollar-pegged tokens, making it sensitive to interest rates. While lower rates could impact profitability, higher rates might benefit Circle. With stablecoin legislation advancing, Circle may face competition from banks and retailers launching their own stablecoins. However, USDC's interoperability features could give it an edge. The analysts believe that stablecoin regulation could enhance USDC's market position, especially if adoption accelerates in the U.S. Read more AI-generated news on: https://app.chaingpt.org/news