Mizuho Securities lowers the target price for Circle (CRCL) to $70, citing key risks to mid-term earnings

According to market news, Mizuho Securities expressed a more pessimistic view on Circle Internet Group's stock on Friday. The investment bank's analysts lowered their benchmark target price from $84 to $70. Circle's stock traded at around $82 on Friday, down nearly 40% over the past month.

"We believe that CRCL's valuation fails to adequately reflect the key risks to its mid-term earnings," Mizuho analysts stated in a research report. The analysts also pointed out potential risks including "upcoming interest rate cuts, relatively stagnant USDC circulation, structurally high (and still rising) distribution costs," and increasing competition in the stablecoin space. Mizuho's forecast stands in stark contrast to that of JPMorgan analysts, who upgraded Circle's stock rating to "overweight" this week and set a new target price of $100 by December 2026.

Mizuho also stated, "Given the declining interest rates, the slower-than-expected adoption of its USDC stablecoin, and the rising costs of token distribution, CRCL's consensus earnings forecasts may face downward revisions in the coming years." Mizuho's optimistic scenario target price for Circle stock is $251, while the pessimistic scenario target price is $38.