Goldman Sachs (GS) cut Coinbase’s (COIN) rating to “sell” from “neutral” and slashed its price target to $45 from $70, the bank said in a report on Monday.
The downgrade was due to the continued fall in crypto prices and the ensuing fall in industry activity levels, Goldman said. Coinbase shares dropped 5.7% to $59.40 in pre-market trading.
In the same report, the Wall Street giant upgraded Robinhood Markets (HOOD) to “neutral” from “sell” with a $9.50 price target. Robinhood shares rose 2.6% to $8.21 in pre-market trading.
Current digital asset levels and trading volumes imply “further degradation” in Coinbase’s revenue base, which Goldman sees falling around 61% year-on-year in 2022, and about 73% in the back half of the year.
While Coinbase recently announced a notable restructuring, which involved laying off 18% of its workforce, the bank says further cuts are needed.
Coinbase will need to make substantial reductions to its cost base to “stem the resulting cash burn” as retail...
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