Circle (CRCL) Has the opportunity to be an important facilitator of stableecoin resumption, Wall Street Bank Citigroup said in a research report Monday, subject to coverage of the stock.
Despite the stock’s big rally, since they become public, Circle’s valuation is not stretched, the report says. StableCOin emitter pricing at $ 31 per Stock in its original public offer (IPO)and hit a record height of $ 299 last week before slipping back to $ 181 ago.
The bank’s analysts initiated coverage of the shares with a buy/high risk assessment and a price target of $ 243, or approx. 34% upside down from yesterday’s end.
Stableecoins are cryptocurrencies whose value is bound to another asset, such as the US dollar or gold. They play an important role in cryptocurrency markets and are also used to transfer money internationally.
Circle benefits from “scarcity value, a ‘winner takes the most’ construction, a great addressable option, legislative momentum” and “Significant operating gearing potential,” the report said.
The company’s “most important competitive strength is its neutrality,” wrote analysts led by Peter Christiansen, adding that “Circle’s defense against the risk of stableco -fragmentation – being the best race will be crucial.”
Due to the company’s weighty operating leverage and low capital intensity, stableecoin emissions can achieve a large excess return given the potential addressable market, the report added.
Rival Wall Street Bank JPMorgan is not so bullish, beginning covering of a circle with an underweight assessment yesterday with reference to the valuation of the stock.
Read more: CIRCLE —VAVORY IS ‘OUT OF OUT OF OUR COMFORT ZONE’, INITIES AT UNDERVIEW: JPMORAN
