Following the initial public offering (IPO) of Circle Internet Group, a leading stablecoin issuer, Wall Street analyst opinions are divided. While the new stock has more than doubled its market value since its release, some analysts are skeptical about its high valuation.
Circle, based in New York, saw its share price increase by 4% in early trading following its market debut at $69 per share. This was the first significant IPO by a stablecoin issuer and marked the largest crypto listing since Coinbase in 2021. The company initially priced its IPO at $31 per share.
The offering was led by J.P. Morgan, Citigroup, and Goldman Sachs. As the quiet period mandated by the industry ended, Barclays, Bernstein, Canaccord Genuity, and Needham initiated coverage, giving ‘buy’ ratings and price targets above $200. These analysts are banking on the swift worldwide adoption of stablecoins, as they continue to gain momentum and take on a pivotal role in the traditional financial landscape.
However, J.P. Morgan and Goldman Sachs expressed concerns about Circle’s high valuation, considering the stock’s swift ascent post-IPO. Goldman started with a ‘neutral’ rating and an $83 price target, and J.P. Morgan gave an ‘underweight’ rating with a $80 price target, implying a 56% downside from the stock’s last close of $180.43.
“While we see potential for strong long-term industry adoption of stablecoins, the range of outcomes are very wide and likely to create substantial volatility in earnings revisions and the share price for at least the near-to-intermediate term,” added analysts at Deutsche Bank.
Overall, the consensus on Circle’s future remains divided among Wall Street’s top analysts.
