Experts from JPMorgan, one of the leading investment banks in the U.S., have begun analyzing Circle (CRCL) stocks with an 'underweight' rating and a price target of $80 by December 2026.
JPMorgan analysts, led by Kenneth Worthington, presented their first official assessment of Circle shares on Monday in the report 'North American Equity Market Research', available on Cointelegraph.
Compared to the current CRCL price of $180, the forecasted value has been reduced by 55% and is based on a future earnings per share (EPS) multiple of 45 times and a $10 premium for potential growth.
"Our price target reflects a significant premium to the IPO price of $31, but also a substantial discount to the current stock price of $180," the analysts note.
Although JPMorgan analysts believe that Circle is well-positioned in the emerging stablecoin market due to its early start and multiple use cases, they suggest that its current market capitalization is overvalued. According to CompaniesMarketCap data, Circle's value is $43.8 billion, showing significant growth since the start of trading on the NYSE with an valuation of $8 billion on June 5.
"Our target price for December 2026 at $80 implies a market capitalization of about $21 billion. We remind you that the average IPO price [$31] was valued at $8 billion," the analysts state.
Competition is cited as a potential threat to Circle. JPMorgan mentions certain events that could threaten the company's market value in the coming months, including the impact of market competition.
Among other risks, JPMorgan refers to the regulation of stablecoins in the U.S., which may require issuers such as Circle to hold equity based on the volume of circulating stablecoins, similar to the European regulation 'Markets in Crypto-Assets' (MiCA).
Although JPMorgan believes that Circle has enough capital to support its stablecoin USDC, new requirements may limit its growth.
Additionally, analysts highlight risks associated with the development of central bank digital currencies (CBDC). While the U.S. has taken a favorable approach to stablecoins, supporting the strength of the dollar, other countries may create pressure on Circle's global expansion.
"Further CBDC adoption worldwide, especially in Europe, could impact Circle's ability to scale globally, negatively affecting long-term growth and profitability," the analysts summarize.
Cryptocurrencies aimed to overthrow banks, now they are becoming them in the fight for stablecoins.
