Morgan Stanley Makes Striking Call on Coinbase Stock

What happened

Morgan Stanley downgraded Coinbase to Sell from Hold and cut its price target to $120 from $258. The analyst cited weaker trading trends and a softer revenue outlook after Coinbase's third-quarter revenue fell 35% to $1.22 billion.

Confirmed

Global impact / market context

Coinbase still earns most of its money from trading activity, so falling trading volume hurts revenue directly. A lower price target signals that analysts now expect a weaker earnings recovery, which can pressure the stock and make future growth plans harder to fund.

Analyst inference

Coinbase shares fell 10.62% on Friday after mixed results, and revenue has declined for three straight quarters. This downgrade adds to a difficult backdrop for crypto-related stocks, where weaker retail trading and softer crypto prices reduce the fees exchanges collect on each trade.

Analyst inference

What to watch

1. Coinbase's transaction revenue fell 44% to $590 million as consumer spot trading activity dropped 59%, so watch whether trading volume stabilizes or keeps shrinking in coming quarters. Confirmed
2. Morgan Stanley previously expected 2026 to bring an earnings reset and a stronger 2027 rebound; watch whether the company's own guidance still supports that recovery path. Proposed
3. Watch Coinbase's expansion into prediction markets, stablecoins and other financial products, since broader product adoption could offset weaker trading revenue if those businesses scale. Analyst inference

Evidence

• gurufocus.com