(Updates with the analyst's commentary.)
Morgan Stanley downgraded Circle Internet (CRCL) to underweight rating from equalweight and cut its price target to $38 from $106.
Morgan Stanley cited its cuts to a "contraction" in Circle's stablecoin cryptocurrency USD Coin,USDC, which "points to a lower-margin shift toward transaction revenue."
Morgan Stanley said it now assumes approximately 33% less USDC in circulation in 2027 and approximately 44% less in 2028.
Stablecoin utility is still limited, with activity "overwhelmingly" slanted toward crypto trading and "transfer activity" over payments, the brokerage said in its note.
Circle Internet has an average rating of overweight and mean price target of $111.54, according to analysts polled by FactSet.
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Price: $59.40, Change: $-3.21, Percent Change: -5.13%