Coinbase is poised outperform as cryptocurrencies become more integrated into financial services, according to Rothschild & Co. Redburn. The investment firm upgraded Coinbase to buy from neutral. Its price target of $417, up from $325, signals upside of 12.1% from Thursday’s close. “The evolving digital asset landscape holds significant opportunities and risks for investors,” analyst Nicholas Watts said Friday in a note to clients. He called the crypto exchange a “well-balanced play on broader digital asset adoption.” Strong digital asset trading volume and token market capitalization growth, particularly as institutional investors’ appetite for cryptocurrencies grows, will also boost the stock, Watts said. “Over the long term, our base expectation is for … growing levels of institutional interest, the emergence of real-world use cases and a continued high level of retail investor engagement,” he wrote. Institutional interest in cryptocurrencies has shown growth in recent years, particularly following the Securities and Exchange Commission’s approval of spot Bitcoin and ether ETFs in the U.S. in 2024. And although “competitive dynamics” have emerged in crypto retail trading, Coinbase is likely to maintain its lead against many other centralized cryptocurrency exchanges, Watts said. “Despite competitive dynamics in crypto retail trading, the resilience of Coinbase’s retail take rate has surprised the market, having consistently averaged c1.5%,” the analyst wrote. Rothschild’s rating for Coinbase falls in line with the majority of calls on Wall Street, although analysts are somewhat divided on the stock. Eighteen of the 36 analysts that cover the stock have a buy or strong buy rating on Coinbase, while 15 analysts are telling their clients to hold the company’s shares, per LSEG. Coinbase shares ticked up roughly 0.5% in premarket trading on Friday. The stock has jumped 128% over the past year.
