Coinbase Global Inc. remains a polarizing name on Wall Street.
Days after a JPMorgan analyst turned bearish on Coinbase’s stock
COIN,
warning that enthusiasm about new bitcoin ETFs could prove a “mirage,” an Oppenheimer analyst has moved to a bullish stance.
“The long-term competitive position of Coinbase remains strong,” Oppenheimer’s Owen Lau wrote in a Friday note to clients. He argued that Coinbase “is stronger than many people realize, and the management team is tougher than most investors think.”
Coinbase shares were rallying more than 1% shortly after Friday’s open.
Lau was upbeat about the recent launch of spot bitcoin ETFs, calling them a “net positive” for Coinbase.
“Financially, COIN benefits from new investors, increasing adoption, higher trading volume and higher custody fee,” he wrote. “Non-financially, COIN acts as critical infrastructure for the ecosystem.”
While the company is under some regulatory fire, having been sued last year by the Securities and Exchange Commission, Lau isn’t sweating the tussle. “We believe Coinbase can prevail in the lawsuit, and there is a good chance that the court will dismiss all or part of this complaint,” he wrote, after recently attending oral arguments for the case.
Lau sees opportunity in the stock, which was down 35% since Dec. 28 as of the publication of his report. All the while, Coinbase’s “fundamentals are in [an] upward trajectory,” he said, as the trading volume run rate for the first quarter so far looks substantially above what it was in the fourth quarter.
“We believe a rate cut, halving, and further adoption can boost the top and bottom lines for COIN over the next two years,” Lau wrote.
He has a $160 target price on the stock, which is 30% above current levels. That target is double the one held by JPMorgan’s Kenneth Worthington, who downgraded the stock to underweight from neutral late Monday.
Of the 27 analysts tracked by FactSet who cover Coinbase shares, 8 have buy-equivalent ratings, eight have neutral ratings, and 11 have sell ratings.
