On Monday, Jefferies, a global investment banking firm, adjusted its price target for Marathon Digital Holdings (NASDAQ:MARA), a cryptocurrency mining company, to $24 from the previous $30. The firm has chosen to maintain its Hold rating on the stock. This decision comes as a response to operational disruptions at Applied Digital sites, which have impacted the firm's confidence in Marathon's future performance.
The analyst from Jefferies noted that the revision reflects concerns over the recent downtime experienced by Marathon at the Applied Digital locations. This downtime has influenced the firm's projections regarding Marathon's operational reliability moving forward. Despite the setback, Bitcoin (BTC) mining profitability was on the rise in February month-over-month, with BTC prices increasing by 15%, outpacing the network hash rate's slower 9% growth.
Over the past year, the network hash rate has nearly doubled, indicating heightened competition and increased overall mining activity. However, this growth has not translated to increased market share for publicly traded mining companies like Marathon. The analyst pointed out that the upcoming halving event, which reduces the reward for mining new blocks, could potentially benefit mining operations that possess modern ASIC hardware and access to low-cost power.
Marathon Digital has been strategically acquiring its hosting partners, a move that the Jefferies analyst views as a defensive strategy in anticipation of the halving event. The firm supports this approach, suggesting that it might help Marathon mitigate potential risks associated with the halving and position the company more favorably for the future.
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