Mizuho downgrades Circle’s rating to “underperform the broader market,” and lowers its target price to $50

Mars Finance reported that on July 19, Bloomberg said Circle’s stock price has fallen by more than 75% from its peak after last year’s IPO. Mizuho Securities U.S. analyst Dan Dolev lowered his Circle rating from “neutral” to “underperform the broader market” this week and set a $50 price target, the lowest on Wall Street. Compared with Thursday’s closing price, it still leaves about 18% downside, far below the $123 average target price from analysts tracked by Bloomberg. Dolev believes Circle faces increased risk from competition among stablecoins.

More than 100 fintech firms, payment networks, crypto companies, and banks, including Visa, Stripe, Coinbase, and BlackRock, are supporting Open Standard, a project that will issue OUSD. Circle mainly earns revenue from yield on USDC reserve assets, while new stablecoin plans such as OUSD share reserve yields with partners and charge lower management fees. Dolev said this business model could attract partners away from Circle and intensify pressure on its pricing and profit margins.

Dolev expects Circle’s adjusted EBITDA in 2027 to be $699 million, below the market’s consensus expectation of $907 million. He also noted that Circle’s USDC distribution agreement with Coinbase will be renegotiated in August, and Coinbase may use the competitive pressure brought by OUSD to seek a higher share of profits.