Marathon Digital (MARA), one of the largest publicly traded bitcoin miners, was named top mining stock pick heading into 2022 by D.A. Davidson.
- The Wall Street investment bank believes that Marathon’s shares have compelling upside after a recent sell-off.
- “With its new low-cost Texas facility and massive new Bitmain order, we project MARA to reach 23 EH/s by 1Q23 without additional capital raises,” analyst Christopher Brendler wrote.
- Brendler sees upside for all six miners that he covers, as he expects better returns in mining stocks than via bitcoin itself. However, Marathon is his top pick as the shares have been one of the hardest-hit mostly due to what he called “misplaced concerns” about a U.S. Securities and Exchange Commission (SEC) inquiry.
- “Our biggest concern has been the ability to maintain margins as competition pushes hosting costs up, but Marathon’s timing, scale and expertise are clearly driving advantaged access,” Brendler wrote.
- Brendler has a buy recommendation on Marathon’s stock with a 12-month price target of $65. His other buy rated miners are Core Scientific, Riot Blockchain (RIOT), Stronghold Digital Mining (SDIG), Hut 8 Mining (HUT) and Argo Blockchain (ARGO).
- Marathon recently agreed to buy 78,000 Antminer S19 XP bitcoin miners from Bitmain for $879.1 million, which is expected to help the company reach mining power of 23.3 EH/s by early 2023, a 600% increase from current levels.
- Marathon’s shares have fallen more than 50% since their peak on Nov. 9, while bitcoin has dropped about 30% over the same time period, according to TradingView data.
- Marathon’s shares were flat in Wednesday morning trading.
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