Home Analysis Coinbase stock could see a near-term pullback – analyst says

Coinbase stock could see a near-term pullback – analyst says

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  • Atlantic Equities downgraded Coinbase’s stock to “neutral” on Wednesday.
  • Kathy Wood also cut her stake in a cryptocurrency exchange today.
  • Coinbase’s stock price is now up over 150% compared to early 2023.

Atlantic equity analyst Simon Clinch says investors should pull out now that Coinbase Global is up more than 150% since the beginning of the year.

Coinbase Stock Has $80 Downside

On Wednesday, Clinch downgraded the cryptocurrency exchange’s rating to “neutral.” He warns that his $80 price target is down 10% from its last closing price.

In a research note, the analyst cited valuations and ongoing regulatory scrutiny as reasons for his dovish view on Coinbase stock.

Given the ongoing regulatory challenges and the surprisingly weak trading volume backdrop, this level of risk/reward looks less attractive.

The Securities and Exchange Commission last month sued Coinbase Global for violating U.S. securities laws. The Nasdaq-listed company also added instant messaging capabilities to its wallet on Wednesday.

Kathy Wood Cuts Coinbase Stake

Clinch recommends refraining from holding Coinbase shares as USDC’s market capitalization is declining and impacting the company’s interest income.

With these factors in mind, we fear that the outlook for the rest of fiscal year 2023 has gradually deteriorated, despite the strong crypto asset prices over the past month.

Coinbase Global Inc is expected to lose 84 cents per share this quarter, compared with $4.95 per share a year ago.

Also on Wednesday, a well-known investor Cathy Wood Reduced investment in virtual currency exchanges. Her flagship Ark Innovation ETF sold 135,152 shares of Coinbase for around $12 million.

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