Morgan Stanley's Circle position increased nearly 6 times, but the rating was downgraded to "Underweight," and the target price was lowered to $38

BlockBeats news, on August 15, Morgan Stanley downgraded Circle (CRCL) stock from "Hold" to "Underweight" on August 3, significantly lowering the target price from $106 to $38. Analysts stated that the downgrade was primarily due to the contraction of USDC circulation, which exposed Circle's high sensitivity to reserve income.

At the same time, the company's business structure is shifting towards a trading revenue model with lower profit margins. The report also lowered Circle's USDC scale forecasts for 2027 and 2028 by approximately 33% and 44%, respectively, and expects the company's GAAP earnings per share to be about 3% and 20% lower than market consensus.

However, Morgan Stanley's latest 13F filing shows that as of June 30, its holdings in Circle shares increased significantly from approximately 1.46 million shares to 8.32 million shares, indicating a clear increase in position during the second quarter.

This means that while Morgan Stanley publicly downgraded Circle's rating and target price at the beginning of August, signaling a cautious outlook, its publicly disclosed holdings as of the end of the second quarter show a significant increase. It is important to note that the 13F disclosure reflects holdings as of June 30 and does not indicate whether positions were adjusted before or after the August rating downgrade. The market's focus is on the apparent contrast between institutional research views and historical holdings disclosures.

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