Coinbase (NASDAQ:COIN), the newly listed digital asset exchange, has received some good news this week as two big banks predicted that shares in the company should be going higher over the next twelve months.
Yesterday, it was reported that JPMorgan analyst Kenneth Worthington initiated coverage of Coinbase an overweight rating stating he expects shares to trade up to $371 – a significant jump over the $240 it trades at today.
“We see the cryptomarkets as durable and growing, and expect Coinbase has the opportunity to influence and benefit from this market growth as it innovates. With 56 million verified users, we see Coinbase driving growth by implementing a marketing program to attract more mainstream investors and to convert verified users into funded active accounts,” sad the analyst.
On Monday, Goldman Sachs threw its opinion onto the list of expectations for Coinbase shares saying the security is a “buy” with a 12-month price target of $306.
“Though it’s still a “nascent” ecosystem and not a big part of Goldman’s base case for Coinbase, the firm says it’s watching the growth and adoption of technologies like stablecoin-based payments; “innovations” in DeFi, or decentralized autonomous blockchain applications; and NFTs, or non-fungible tokens and the “creation of markets for tokenized, real-world assets,” said the analyst. “If meaningful parts of the economy can transition to blockchain and crypto-native technology over time, we see significant opportunity for [Coinbase] to benefit from its status as a critical element of the financial infrastructure for the ecosystem.”
Coinbase shares have trended higher on the news but far off their all-time pre-listing high of $429/share when market exuberance drove the stock higher.
Still, there are risks to Coinbase as much of its recent trading activity has been driven by a booming Bitcoin and other altcoins. During Q1, Bitcoin rocketed to all-time highs but in recent weeks has cooled. Coinbase has said it expects institutional participation to play a larger role in its business in the coming years – a shift that should help drive more revenue.
Goldman and JPM are not alone in their belief that Coinbase is underpriced right now. According to Yahoo, the average price target is a bit over $400/share with one analyst believing Coinbase will cruise to over $600/share.
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