Morgan Stanley cuts Circle price target to $38 from $106, downgrades to Underweight

Aug. 3 (UTC+8) — Morgan Stanley downgraded Circle (CRCL) to "Underweight" from "Hold" and slashed its price target to $38 from $106, according to ME News. Analyst James Faucette said the move reflects a pullback in USDC circulation, which he said underscores how sensitive Circle's reserve income is and signals a shift toward a lower-margin, transaction-driven revenue mix. Morgan Stanley cut its USDC volume outlook for Circle by roughly 33% for 2027 and 44% for 2028. The bank also expects Circle's GAAP EPS to come in about 3% and 20% below market consensus. Faucette added that tokenized money market funds and bank deposit products could weigh on USDC balances and revenue-sharing rates, while Circle's USYC product was described as having a comparatively weak economic model. Circle's agency payments business was characterized as small, with daily transaction volume falling to about $41,900, implying an average ticket size of roughly $0.24. Morgan Stanley also pointed to Open USD's shared-governance and reserve-income structure as a potential cost headwind for Circle's efforts to sustain USDC distribution channels. (Source: BlockBeats)

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