Coinbase Upgraded by BofA
- Price target increased to $217 from $110
- Upgrade influenced by larger investor base for cryptocurrency
BofA Global Research and BofA Securities have upgraded cryptocurrency exchange Coinbase Global to 'neutral' from 'underperform'. The price target for Coinbase has been increased to $217 from $110, which is approximately 9% higher than the stock's previous close.
The upgrade decision is influenced by the larger investor base for cryptocurrency following the SEC's approval of spot bitcoin ETFs in January. The current macro environment is also seen as favorable for cryptocurrency market cap appreciation and trading volumes.
Coinbase's profitability is expected to benefit from operating leverage following significant expense cuts in 2022. The company's increased diversification of its revenue streams is also expected to reduce earnings volatility. However, risks include ongoing regulatory overhang and near-term dependence on transaction revenue for profitability.