On Friday, Oppenheimer analysts adjusted their outlook on Coinbase Global Inc. (NASDAQ:COIN), reducing the price target to $334 from the previous $358.
Despite the price target cut, the firm maintained an Outperform rating on the cryptocurrency exchange’s shares.
The revision follows a recent sell-off of Coinbase stock since late December, which Oppenheimer analysts see as an opportunity for investors.
The firm’s optimism is based on several key predictions, including a strong performance in the fourth quarter of 2024 and the possibility of upward earnings-estimate revisions for future years.
Additionally, the potential for Coinbase to be included in the S&P 500 index in 2025 is cited as a positive factor.
The analysts also point to a favorable regulatory environment under a pro-crypto President, administration, Congress, and SEC, which could further bolster the company’s prospects. They anticipate that the increased adoption of blockchain for payments and tokenization, along with more participation from traditional financial companies, will bring new capital into the space. The expected public offerings of more blockchain-related companies could also contribute to a more robust market.
The analysts said "As a leading, focused crypto player with optionality in Web3 payment use case, the stock is a bargain, in our view, trading at a discount to HOOD (NASDAQ:HOOD) (~27x EV/EBITDA on consensus forecasts). We believe both core earnings growth and multiple expansion can drive alpha."
The firm believes that Coinbase’s core earnings growth, coupled with potential multiple expansion, can generate significant returns for investors.
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