JPMorgan Issues Hold Target for Coinbase Shares

JPMorgan analysts have held a neutral stance on Coinbase Inc’s shares COIN), meaning they neither recommend buying nor selling it to clients. The experts have now set a price target of $196 by December 2025. This comes even after Coinbase’s third-quarter earnings did not meet market expectations. Despite the dip in earnings, analysts highlight Coinbase’s ongoing efforts to innovate and grow within the ever-evolving crypto landscape.

Coinbase’s Resilience Hold Still Despite Bearish Earnings  

Coinbase’s third-quarter results highlighted a mixed performance. The exchange recently reported $75 million in net income. Although this figure is higher than the previous year, it fell short of the $112.2 million analysts had expected. 

Additionally, the exchange’s net revenue dropped from $1.38 billion in the previous quarter to $1.13 billion this quarter. This decline reflects the volatility in the crypto market, which has speculatively impacted Coinbase’s performance. However, despite these ups and downs, the overall picture suggests Coinbase is staying resilient and adaptable in a rapidly changing industry.

In a move that underscores its confidence, Coinbase’s announcement of a $1 billion share buyback program alongside its earnings report. The board of directors authorized this repurchase, which will be executed based on favorable market conditions. This move underscores Coinbase’s commitment to enhancing shareholder value while navigating the complexities of the crypto market.

Analysts Focus on Coinbase Inc’s Innovative Strides

Analysts at JPMorgan, including Kenneth B. Worthington and his team saw beyond the exchange’s immediate setbacks. They emphasize that Coinbase is successfully executing plans to enhance its business model. 

The experts noted that the firm is actively exploring innovative avenues which aim at solidifying its role as a key player in the crypto arena. Coinbase’s initiative includes its Layer-2 solution, Base, stablecoins, and enhanced wallet features. They added that Base continues to lead as a layer 2 solution, with over $2.7 billion in Total Value Locked (TVL), making transactions cheaper and more efficient. 

The analysts also commend Coinbase for implementing effective cost-cutting measures, which are steering the company toward a more sustainable business model. They express a cautious optimism about the regulatory environment in the U.S. They noted a shift towards more favorable crypto regulations that could benefit the market at large.

JPMorgan Analyst Eyes Long-Term Growth Amid Market Fluctuations

JPMorgan’s $196 price target for Coinbase is based on a method called “normalized earnings.” They estimate that Coinbase could earn about $4.91 per share under stable market conditions. 

They then apply a 40x multiple to these earnings to value the company similarly to other high-growth financial firms. Currently, Coinbase’s stock is priced at $180.63, up 0.77% in the last 24 hours, although it recently traded above $200 before the earnings report. This approach reflects JPMorgan’s belief in Coinbase’s long-term growth potential despite recent earnings challenges.