Morgan Stanley downgraded COIN to "underweight," expecting that cryptocurrency trading may further stagnate after Binance was attacked

According to CNBC, Morgan Stanley has downgraded the stock rating of cryptocurrency trading platform Coinbase (COIN) from equal weight to underweight, and significantly lowered the target price from $258 to $120, implying about a 16% downside from last Friday's closing price.

Analyst Michael Cyprys stated in a client report on Monday that the company is still advancing a broader strategy, but recent trading trends have weakened, forward revenue outlooks are soft, and the uncertain outlook for the cryptocurrency market makes the "profit recovery" narrative harder to establish.

Cyprys pointed out that Coinbase's cryptocurrency trading in October has weakened, with fourth-quarter trading revenue of about $165 million as of October 25, which, at this pace, would amount to about $607 million for the year, approximately 11% lower than the market consensus of about $685 million.

In the past month, COIN's stock price has fallen by about 22%. After competitor Binance faced a hacking incident worth about $6 billion last week, cryptocurrency trading may further stagnate, dragging down Coinbase's earnings and stock price.

Morgan Stanley has lowered its revenue forecast for Coinbase in 2027 by 28%, and adjusted EBITDA forecasts have been cut by 47%. This rating contrasts with the mainstream view on Wall Street: LSEG data shows that among the 41 analysts covering Coinbase, 26 have given buy or strong buy ratings, while 13 hold.