Coinbase is the 'most misunderstood' crypto stock and can rally nearly 50%, Bernstein says

Bernstein analyst Gautam Chhugani maintained an Outperform rating on Coinbase (COIN) and significantly raised its price target to $510 from $310, projecting approximately 48% upside from Tuesday's close. Chhugani asserts that Coinbase is widely misunderstood, underappreciated for its dominant position across U.S. crypto trading, stablecoins, institutional services, and its substantial growth opportunities in the derivatives market, further bolstered by anticipated regulatory clarity. This bullish outlook, which estimates Coinbase's 2024 revenue at $9.5 billion, prompted a 2% premarket share increase.

Analysis

Bernstein has reiterated its Outperform rating on Coinbase (COIN) while significantly increasing its price target to $510 from $310, implying a potential upside of approximately 48% from its recent closing price of $344.82. The analyst, Gautam Chhugani, posits that Coinbase is fundamentally misunderstood by the market, which remains bearish despite multiple growth catalysts. The bullish thesis is anchored in Coinbase's dominant market position, including its leadership in U.S. crypto trading, its large stablecoin business, its strong foothold in institutional crypto services, and its acquisition of a major global crypto options exchange. Chhugani also highlights the company's resilience in maintaining market share against new entrants and views upcoming competition from traditional brokerages as less threatening due to their incomplete product suites. Future growth is expected to be propelled by regulatory developments, such as the proposed GENIUS and CLARITY acts, and a significant expansion into the crypto derivatives market. The firm is now preparing to launch perpetual futures, a move that underpins Bernstein's projection of $9.5 billion in total revenue for Coinbase this year.

Key Decisions for Investors

• Investors with a bullish view on the digital asset ecosystem should consider the Bernstein analysis as a strong validation of Coinbase's long-term growth potential, particularly given the 48% upside implied by the new price target.
• Monitor legislative progress on the GENIUS and CLARITY acts, as their successful passage would provide significant regulatory clarity and likely serve as a major de-risking catalyst for the stock.
• Track the company's execution in the derivatives market, specifically the launch and adoption of its perpetual futures product, as this is a key component for achieving the $9.5 billion revenue forecast underpinning the upgraded target.
• Given the stock's premarket rise on this news, investors should assess entry points carefully, weighing the long-term thesis against potential short-term volatility and the market's reaction to analyst upgrades.