Mizuho downgrades Circle to Underperform, cuts its target price to $50

According to Bloomberg, Circle’s stock price has fallen more than 75% from its post-IPO high last year. Dan Dolev, an analyst at Mizuho Securities USA, downgraded Circle this week from "Neutral" to "Underperform", setting a Wall Street-low target price of $50, which implies roughly 18% downside from Thursday’s closing price, well below the average analyst target of $123 tracked by Bloomberg. Dolev argues Circle faces rising competition risks in the stablecoin space. Over 100 fintech firms, payment networks, crypto companies and banks, including Visa, Stripe, Coinbase and BlackRock, are backing the Open Standard project, which will issue OUSD. Circle’s stock fell 7.7% on Thursday, the same day Visa launched a stablecoin issuance, transfer and management platform for financial institutions. Circle generates most of its revenue from interest on USDC’s reserve assets, while new stablecoin initiatives like OUSD plan to share reserve returns with partners and charge lower management fees. Dolev says this business model could draw partners away from Circle, intensifying pricing and margin pressure on the firm. He projects Circle’s adjusted EBITDA for 2027 will hit $699 million, below the consensus market estimate of $907 million. He also noted that Circle and Coinbase’s USDC distribution agreement is set to be renegotiated in August, with Coinbase likely to leverage competitive pressure from OUSD to secure a higher revenue split.