Coinbase Rally May Be a Selling Opportunity, Says Bank of America

Analyst Jason Kupferberg downgraded the crypto exchange to underperform from neutral, saying 2023 estimates are still too high.

AccessTimeIconJan 11, 2023 at 2:14 p.m. UTC
Updated May 9, 2023 at 4:05 a.m. UTC

The Coinbase (COIN) consensus analyst revenue outlook for this year is still too rosy, says Bank of America’s Jason Kupferberg. He downgraded the stock to underperform from neutral and cut his price target to $35 from $50.

Kupferberg’s downgrade comes after COIN’s near-30% rally to start 2023. The downgrade likely helped send the shares lower by 3.6% to $41.68 before the stock market open.

The stock’s gain this year comes after a decline of more than 80% in 2022, thanks in part to a 5% bounce in the price of bitcoin (BTC). In addition, Coinbase announced on Tuesday its intention to reduce headcount by about 20% as part of a restructuring because of the ongoing crypto winter.

Though management’s moves are “encouraging” and “nimble,” said Kupferberg, his team is cutting its revenue forecast for 2023 after its analysis of fourth-quarter crypto transaction volume data prompted a “murky at best” outlook for this year.

Given the “volatile crypto environment,” he said, the shares are likely to struggle should the consensus estimate be revised lower.

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Stephen  Alpher

Stephen Alpher is CoinDesk's managing editor for Markets. He holds BTC above CoinDesk’s disclosure threshold of $1,000.