Morgan Stanley downgrades Coinbase and cuts its target 53% to $120, and the shares close near $138 as bitcoin slips to about $76,700

Morgan Stanley turned negative on Coinbase on Monday. Analyst Michael Cyprys downgraded the stock to underweight from equal-weight and cut his price target to $120 from $258, a 53% reduction, in a note to clients. "Confidence in the earnings recovery has deteriorated," he wrote, citing weaker trading, a softer revenue outlook and an uncertain crypto backdrop after the Binance theft, CoinDesk reported.

Morgan Stanley cut its 2027 revenue forecast by 28% and its 2027 adjusted EBITDA estimate by 47%, and trimmed 2028 by 18% and 25%. It now expects about $2.4 billion of normalized EBITDA in 2028, roughly 14% below 2025, and values the shares at 12 times EBITDA instead of 20. Coinbase's third-quarter revenue of $1.22 billion was down 35% from a year earlier, with transaction revenue down 44% at $590 million, and the company reported about $165 million of transaction revenue for the fourth quarter through October 25. The note says the roughly $6.3 billion Binance breach could dent confidence in centralized platforms and invite more regulatory scrutiny, even though Coinbase was not directly affected, and Cyprys still called Coinbase one of the best-positioned platforms in crypto, according to Investing.com.

Coinbase shares closed at about $137.80, a fall of about 4% by CoinDesk's quote page and Investing.com's ticker and about 5% in CoinDesk's live blog's late-session update, after a 10% drop last week. Crypto stocks fell with the tech tape: that update had Galaxy Digital down 9% and Strive down 6% shortly before the close as the Nasdaq reversed an early gain; The Motley Fool put the Nasdaq down 1.1% and the S&P 500 down 0.5%.

Bitcoin was at about $76,700 in the early evening US time, down about 2% in 24 hours and 4% over the week, per data cited by The Motley Fool. CoinDesk's live blog said it had briefly threatened $79,000 earlier Monday, when a report from Iran's state news agency that the Supreme Leader had authorised the government to hold talks sent oil sharply lower, before the bounce faded. Tuesday brings the US midterm elections.