Markets
Coinbase Global Upgraded to Neutral at BofA Cryptocurrency Markets and Diversification (NASDAQ:COIN)
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- Coinbase Global (NASDAQ:CURRENCY) shares gained 2.4% in premarket trading Friday after Bank of America Securities upgraded the cryptocurrency exchange to Neutral from Underperform due to the company’s expense discipline and diversification strategy combined with a best crypto prospect.
- “The current macroeconomic environment has been positive for cryptocurrency market capitalization appreciation and trading volume,” BofA analyst Mark McLaughlin wrote in a note to clients.
- At the corporate level, he points out that Coinbase’s operating leverage (CURRENCY) significant cost cuts in 2022 will help keep it profitable going forward. Furthermore, “greater diversification of revenue sources less correlated to overall volumes should dampen earnings volatility.”
- The counterweights are those of Coinbase (CURRENCY) reliance on transaction revenue for profitability and regulatory excesses related to the ongoing SEC litigation.
- McLaughlin’s Neutral rating on the stock is in line with SAQuant evaluationTHE SA analysts’ average ratingand the average rating on Wall Streeteverything to Hold.