Wall Street Divided on Circle Stock as JPMorgan, Goldman Sachs Warn of Overvaluation
Divergent Analyst Views Follow Circle’s IPO
Circle (CRCL) made its public debut to much fanfare, but Wall Street remains split on the stock’s fair value. Following the post-IPO quiet period, leading financial institutions including Barclays, Bernstein, Canaccord Genuity, Needham, JPMorgan, and Goldman Sachs released their initial ratings and price targets.
- Bullish Analysts:
- Barclays, Bernstein, Canaccord, and Needham set price targets above $200, forecasting further upside from the current price of $185.
- Their optimism centers on Circle’s leadership in the stablecoin market, regulatory advantages, and strong distribution partnerships.
- “CRCL is building a market-leading digital dollar stablecoin network, with a strong regulatory edge, liquidity headstart and marquee distribution partnerships. This is hard to replicate,” Bernstein analysts wrote.
JPMorgan and Goldman Sachs Urge Caution
- JPMorgan’s Stance:
- JPMorgan issued a price target of $80, about 59% below Circle’s current trading price.
- The bank acknowledged Circle’s early-mover advantage and strong management, but flagged concerns about an “elevated” valuation.
- “Circle and USDC have an early-mover advantage in what has been a winner-takes-most market… However, we see Circle’s current market capitalization elevated,” said Kenneth Worthington, JPMorgan analyst.
- Goldman Sachs’ View:
- Goldman Sachs initiated coverage with a neutral rating and an $83 price target.
- Goldman praised Circle’s market position and growth prospects, but, like JPMorgan, cautioned that the stock is currently overvalued.
- “We view CRCL’s business and growth attractively, but valuation appears elevated,” said analyst James Yaro.
Key Takeaways: Opportunity Meets Valuation Risk
While Circle’s rapid growth and regulatory edge in the stablecoin sector are attracting bullish forecasts, leading Wall Street banks warn that valuation risk is significant at current price levels. Investors are advised to weigh Circle’s competitive strengths against the possibility of a near-term correction if expectations get ahead of fundamentals.
