Circle Internet Group (CRCL) PT Lowered to $140 at Bernstein SocGen Group

Bernstein SocGen Group analyst Gautam Chhugani lowered the price target on Circle Internet Group (NYSE: CRCL) to $140.00 (from $190.00) while maintaining a Outperform rating.

The analyst comments "We expect Circle to report a broadly flat quarter. USDC supply ended Q2'26 at ~$73Bn, down from $77Bn in Q1'26, with average supply rising modestly from ~$75Bn to ~$76Bn QoQ. Recent crypto weakness has stalled USDC supply growth, but this has to be seen in the context of historical growth algo for stablecoins. In the 2021-22 cycle, USDC grew 120% YoY and then had a > 50% drawdown in 2023, bottoming in Q4’23. For 2024-25, USDC grew 110% YOY, with USDC supply largely flat through a drawdown (sign of maturity in the space!). Going forward, we expect USDC growth to be driven by strong partnerships in payments, financial services, real-world assets tokenization and its role in the agentic economy. The recent OUSD announcement has been a negative sentiment on the stock. Circle has been on an aggressive partner build out spree - signing actual MOUs with the same entities announced in the OUSD alliance - Kakao, Samsung, BNY, Nium, etc. E.g. USDC partnership with Samsung involves integration with the Samsung wallet already being live. Previously, Samsung official commented re OUSD - ‘there were no official consultations, and we do not even know what role we would play” (Link). Also worth highlighting Visa management comments from the earnings yesterday - ‘Visa going forward will remain multi-coin, multichain. Our role is not to pick winners. Our role is to help clients connect to the stablecoin ecosystem securely and at scale, regardless of which stablecoin, which network, which infrastructure, ultimately gain adoption.’ As we have reiterated, stablecoin buildout is a multiyear distribution, infrastructure and liquidity buildout. USDC is a clear market leader in regulated stablecoins. We update our USDC supply estimate to reach ~$170Bn by 2028E (vs. ~$290Bn previously) adjusting for crypto market weakness. In our 10-year USDC growth model, we maintain CAGR at 32%, but adjust near term 2027-28 USDC estimates for native crypto cyclicality. The resulting impact on reserve income is partially offset by higher reserve yields. Consequently, our reserve income estimate for 2026/2027E/2028E declines by ~17%/18%/13%. We value CRCL based on a long-term DCF (PT $140), implying ~23x CY28E adjusted EBITDA, supported by revenue and adjusted EBITDA CAGRs of ~36% and ~52% over CY26-28E."

You May Also Be Interested In

• AxoGen, Inc. (AXGN) PT Raised to $55 at Citizens on Q2 Performance
• JPMorgan Downgrades Banco Santander Brasil SA (SANB11:BZ) (BSBR) to Neutral
• Baird Downgrades Paymentus (PAY) to Neutral