Analysts initiate Circle, some cautious on lofty valuation amid stablecoin boom

Investing.com -- Analysts initiated coverage of Circle, the company behind USD Coin, with opinions diverged sharply as the stock’s meteoric rise collided with questions about how much growth is already priced in.

Shares were around $181 in Monday premarket trading, nearly six times their $31 IPO price on June 5

Bernstein and Barclays led the bulls, starting Circle with Outperform and Overweight ratings and price targets of $230 and $215, respectively.

Both argued that a regulatory head‑start, deep liquidity and partnerships give Circle a durable edge as stablecoins move from crypto exchanges into mainstream payments and capital markets.

JP Morgan struck a more cautious tone, initiating at Underweight with an $80 target. While acknowledging Circle’s early‑mover advantage and management strength, the brokerage said the current market value, roughly $34 billion, looks stretched against an addressable market that may take years to materialise.

Oppenheimer began at Perform, also pointing to valuation after the stock’s four‑week surge.

The brokerage advised investors to await legislative clarity on U.S. stablecoin rules, upcoming earnings and the expiration of insider lock‑ups for a better entry point.

All four firms see ample room for stablecoin adoption. Bernstein projects industry supply could swell to about $4 trillion over the next decade, with Circle capturing as much as 30%.

Barclays called regulatory progress and network effects “a steady drumbeat” that should broaden use of USDC beyond the crypto sphere.

Analysts likewise flagged risks like rising competition from tokenised bank deposits and money‑market funds, sensitivity to U.S. interest‑rate cuts that would trim float income, and heavy reliance on partners such as Coinbase (NASDAQ: COIN) and Binance.

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