Coinbase shares soared after JPMorgan Chase upgraded the company’s stock rating to “overweight” on the monetization potential of the Base Network.
The bank also highlighted changes to Coinbase’s USDC rewards and new Base-integrated DEX features driving profits and risk-management levers.
JPMorgan Upgrades Coinbase Stock
Coinbase shares (COIN) rallied on Friday after JPMorgan Chase upgraded the exchange, highlighting the potential of new monetization opportunities associated with its Base Network and USDC payout strategy. Analysts lifted their rating of Coinbase stock from “neutral” to “overweight” and also raised their price target to $404, a 15% upside from current levels. According to JPMorgan, Coinbase is leaning into its Base Layer-2 technology and exploring ways to capture value from the nascent platform’s growth.
The bank also predicted that the launch of a Base token could present Coinbase with a $12 billion to $34 billion opportunity, putting Coinbase’s retained share between $4 billion and $12 billion. JPMorgan analysts also noted that the Base token’s distribution would likely favor developers, validators, and the larger Base community.
Analysts also highlighted Coinbase’s integration of a DEX aggregator within the Base app to hedge against the growth of decentralized exchanges.
USDC Rewards
JPMorgan also highlighted margin expansion potential due to changes in Coinbase’s USDC rewards program. According to the bank’s analysts, Coinbase may reduce interest rewards for most users, offering them primarily to Coinbase One users. The bank believes such a move could add around $374 million in annual earnings at current USDC interest rates and yields.
COIN shares rallied over 9% following the news, reaching $353. The stock’s value is up about 42% year-to-date, taking the company’s market capitalization past $90 billion.
Attention Turns To Coinbase Earnings
Coinbase will report its third-quarter earnings results on October 30. According to a report by Zacks Investment Research, analysts expect the company to post earnings of $1.06 per share, a 71% increase year-over-year, and revenue of $1.74 billion, a 44.1% increase from the same quarter last year.
Coinbase reported a mixed second quarter, with the exchange missing earnings expectations. However, it achieved several operational milestones, including higher stablecoin revenue and rising stablecoin balances. Coinbase has also been focusing on its subscription and services segment. Analysts expect the segment to contribute between $665 million and $745 million in the third quarter. The exchange also highlighted several key developments during the quarter. These include the approval of the GENIUS Act. The act established a clear regulatory framework in the US for stablecoin adoption.
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