JPMorgan Issues Underweight Rating for Circle, Sets $80 Price Target
JPMorgan Chase has initiated coverage of Circle (CRCL) with an underweight rating and a $80 price target for December 2026. The analysis, led by Kenneth Worthington, examines Circle’s position in the competitive stablecoin market while highlighting potential risks.
Understanding the Underweight Rating
An underweight rating indicates JPMorgan expects Circle shares to underperform compared to other stocks in their coverage. The $80 target represents a 55% decline from Circle’s current $180 share price. This projection uses a 45x multiple of estimated 2027 earnings per share plus a $10 premium for growth potential.
Circle’s Stablecoin Market Position
Circle maintains a strong position in stablecoins through its widely adopted USDC. However, JPMorgan analysts express concerns about Circle’s $43.8 billion market capitalization, considering emerging competition and regulatory uncertainty.
Key Challenges Facing Circle
- Growing competition from alternative stablecoin providers and crypto investment products
- Potential US regulatory changes similar to Europe’s Markets in Crypto-Assets (MiCA) framework
- Expansion threats from developing central bank digital currencies (CBDCs) worldwide
Market Response and Future Considerations
Circle shares fell 15.5% following the report’s release, after peaking above $290 in mid-June. The analysis suggests Circle must carefully balance its market leadership with adaptation to evolving regulations and competition.
