Citi raises Coinbase target but remains neutral on regulatory risk
Citi lifted its Coinbase (NASDAQ:COIN) target price to $151 from $90 per share in a note Friday, maintaining a Neutral rating on the stock.
In the memo, analysts spoke on the cryptocurrency exchange's defense vs the SEC lawsuit, which they note has «begun with oral arguments before the SDNY to dismiss the case.»
«Given the stature of the case, we agree with the notion that this dispute is unlikely to be solved on motions alone – likely pushing the summary judgment phase >1 year,» the analysts wrote.
«While Ripple v. the SEC was a positive step for the industry, we’re reminded that (i) XRP is neither PoW or PoS and that (ii) Ripple’s defense efforts were unsuccessful in modifying the Howey Test – both elements crucial in solidifying legal precedent for “staking” and “altcoin” regulatory authority (security or not),» they added.
The bank remains Neutral on COIN purely on regulatory risk, as any potential ruling could have a significant impact on the company’s future business model.
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