Morgan Stanley cuts Circle Internet Group to Underweight as TD Cowen initiates Buy coverage

Wall Street analysts offered sharply different takes on Circle Internet Group as coverage shifted for the stablecoin issuer, setting up a renewed debate over what comes next for the crypto infrastructure company.

In a report cited by Yahoo Finance, Morgan Stanley downgraded Circle to Underweight and reduced its price target, indicating a more cautious view of the company’s near-term outlook. Morgan Stanley’s change was framed as a cut in expectations rather than a wait-and-see posture, with the lower target reflecting revised assumptions.

The same Yahoo Finance item also highlighted that TD Cowen started coverage of Circle with a Buy rating, a stance that runs counter to Morgan Stanley’s more defensive view. The contrast suggests analysts are split on key variables that tend to drive outcomes for stablecoin businesses, including demand for issued stablecoins, transaction activity, and how Circle monetizes its ecosystem.

Circle’s business centers on stablecoins, digital tokens designed to hold a stable value relative to a reference asset, typically a fiat currency. For companies in this space, analyst models often hinge on how much trading and settlement activity is occurring on platforms that use stablecoins, as well as the durability of revenue streams tied to issuance and related services.

The disagreement is notable because it implies the stock’s valuation and growth narrative are not being treated uniformly by the sell-side community. When one firm pairs a downgrade with a lower target while another initiates with a Buy, it often means they are weighting risk factors differently or forecasting different growth rates and margins.

Still, the market report does not provide granular detail on the specific drivers behind Morgan Stanley’s target reduction or TD Cowen’s bullish initiation in the information available here. It also does not disclose whether either firm referenced particular product developments, regulatory developments, or changes in client demand that would explain the divergence.

For investors and industry watchers, the immediate takeaway is that analyst sentiment around Circle is not settled. Near-term catalysts that can move assumptions in stablecoin markets include shifts in usage across payment and trading venues, changes in partner volumes, and any regulatory clarity or friction that affects issuance, redemption, or compliance costs.

What to watch next is whether subsequent reports from either Morgan Stanley or TD Cowen provide more detailed justifications for their calls, and whether other analysts follow one direction or carve out a middle position. Additional commentary that ties ratings and price targets to measurable performance trends would be especially relevant for assessing how durable the split view may be.