By Sam Boughedda
Shares of Coinbase (NASDAQ:COIN) were upgraded to Buy from Outperform by a Daiwa analyst on Friday, with the firm's price target on the stock kept at $100 per share.
The firm upgraded the stock after the recent share price retracement, with Coinbase shares down over 22% in the last month. Daiwa also has a positive view on the cryptocurrency market in general.
"We believe Coinbase holds close to 15% of all circulating ETH on its platform, making it one of the largest holders of ETH globally, and hence should be a key beneficiary of increased ETH staking demand post-Merge," said the analyst. "The company only enabled ETH staking for US domestic institutional clients on Coinbase Prime in early August."
Daiwa sees $554 million in total staking revenue for Coinbase in 2023E, up 73% YoY.
'We forecast its staking revenue contribution to rise from 9% for 2Q22 to 15% for 4Q23E, helping the company diversify its revenue away from more-cyclical trading revenue," the analyst added. "We believe the cyclical low of the crypto market is behind us, and the upcoming Ethereum upgrade will catalyse a strong comeback."
Coinbase shares are up 6.55% at the time of writing.