Shares of Coinbase Global Inc (NASDAQ: COIN) have come down nearly 35% in two months, but BofA Securities says the days of downside are over for the cryptocurrency company.
Coinbase upgraded to ‘buy’
BofA Securities’ Jason Kupferberg raised his rating on Coinbase this morning to “buy” with a price target of $340 a share that represents a 45% upside from here. In his note, the analyst wrote:
The main fundamental reason for the rating change is increasing signs of revenue diversification beyond retail crypto trading, a trend we think could accelerate in 2022 and beyond.
Revenue from subscription and services made up 12% of the net revenue for Coinbase in Q3, and Kupferberg expects it to climb to 16% in 2023. He agreed there were risks on the regulatory side but said:
We continue to believe that COIN’s technology/innovation and brand are positive differentiators, as more consumers and institutions engage with various parts of the crypto/digital asset ecosystem.
The recent sell-off in Coinbase, Kupferberg noted, makes up for an exciting point of entry for potential investors. Among other notable Coinbase bulls is billionaire investor Kevin O’Leary, who bought more of it in December.
Bitcoin tanked to $42,000
Also on Thursday, Bitcoin tanked to a low of $42,000. The world’s largest cryptocurrency by market cap has now lost nearly 20% over the last two weeks. Commenting on the price action, Ritholtz Wealth Management’s Josh Brown said on CNBC’s “Halftime Report”:
I’m long Bitcoin personally. I don’t have a strong opinion about whether or not it will keep falling. I just think it’s important for investors to diversify within the space and not anchor to any one specific protocol.
The sell-off in BTC could be related to the report last night that said the U.S. Federal Reserve could take a more aggressive approach in raising rates this year than previously indicated.
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