Coinbase Global (COIN) stock was up 3% as of writing after JPMorgan analyst Kenneth Worthington upgraded his rating on the cryptocurrency exchange from Hold to Buy and raised the price target from $342 to $404. COIN stock has risen about 30% year-to-date. Worthington cited several positives for the rating upgrade, including monetization opportunities and an attractive valuation.
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JPMorgan Turns Bullish on COIN Stock
Worthington explained that he upgraded Coinbase Global stock as he sees emerging monetization opportunities and fading risks, along with an attractive valuation compared to other cryptocurrency players.
The analyst highlighted two opportunities he expects Coinbase to explore, which he believes will meaningfully contribute to its equity value. First, he sees COIN exploring a Base token, which could accelerate the pace of development on the Base blockchain (launched in August 2023). In fact, Worthington expects the market capitalization of such a token to eventually surge to the range of $12 billion to $34 billion.
Second, Worthington expects Coinbase to further explore its USDC payouts to promote Coinbase One, its monthly subscription service. The analyst estimates that COIN pays in excess of $1.00/share (excluding the higher payout for Coinbase One accounts), indicating that client segmentation could be significantly additive to its earnings per share (EPS).
Meanwhile, Worthington believes that the threat of decentralized exchanges stealing market share of cryptocurrency spot trading from Coinbase has essentially begun to stabilize, supported to some extent by the launch of decentralized trading via Base. The analyst added that he arrived at his price target by applying the 50x P/E (price-to-earnings) multiple of rivals Circle (CRCL) and Bullish (BLSH) to COIN’s 2027 earnings estimate, including the value of the Base token.
Is COIN a Good Stock to Buy?
Currently, Wall Street has a Moderate Buy consensus rating on Coinbase Global stock based on 14 Buys, 10 Holds, and two Sell recommendations. The average COIN stock price target of $385.33 indicates 19.4% upside potential from current levels.
