Today, Coinbase (NASDAQ:COIN) is among the biggest losers in an overall red market. All major indices are down, as investors appear more willing to take risk off the table today. For investors in COIN stock, however, this has culminated in a 7% down day in early afternoon trading.
Of course, there are a number of macro risks investors should be pricing in right now. The yield curve (specifically, the 2-10 Treasury yield spread) just inverted, a key warning sign of a recession. And the Federal Reserve appears intent to raise rates aggressively into this inversion. Accordingly, investors are right to price in lower expectations for growth stocks moving forward. Much of that has to do with what percentage of future earnings are expected to come from future years. This is a key factor to consider when it comes to Coinbase and its shares.
That said, there’s another company-specific catalyst investors are watching today. So, let’s dive into what’s moving COIN stock lower right now.
COIN Stock Drops on Price Target Cut
Analyst price targets are important measures that many investors take into consideration. Of course, some view these targets as lagging indicators, following stocks higher or lower. However, when price targets are raised or cut in a significant way, many investors take notice.
That was the case today with Mizuho Securities, which slashed its price target on Coinbase from $220 to $190. Mizuho did reiterate a “neutral” rating on the stock. However, this is a rather significant price cut. Just a week ago, COIN stock traded at around $205 per share.
This price target cut suggests analysts are growing less fond of Coinbase’s potential future revenue streams. In particular, Mizuho analysts aren’t giving much credence to the company’s focus on the non-fungible token (NFT) market. Whether the market ultimately disagrees with this view remains to be seen. Still, investors appear to be taking the report seriously as of today.