Circle Stock Drops Over 8% as Analyst Cuts Price Target by 25% Before Earnings

Bernstein analyst Gautam Chhugani lowered his price target on Circle stock (CRCL) by 25%, dropping it from $190 to $140 ahead of the company’s upcoming earnings report. Despite the cut, Chhugani pointed out in a research update that rival group Open USD “poses less of a threat to Circle than the market expected”. Investors worried that Open USD would steal Circle’s business, but Chhugani explains that this fear is exaggerated because major companies like Visa (V) are still working directly with Circle.

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Bernstein’s Lower Target Has Caused Circle Stock to Plunge

Circle makes the USDC token (USDC-USD) and saw Circle stock price drop over 8% during Friday trading. The fall pushed shares down near $60 as traders reacted to the price target cut.

Furthermore, the target cut comes just days before Circle posts its second-quarter earnings report on August 5. Concerns over slower sales growth led analysts to lower their predictions ahead of the report.

Circle’s New License Fails To Stop Stock Drop

On the other hand, Circle shared a key regulatory win on Friday morning. The company earned a state trust license from the New York Department of Financial Services for Circle New York Trust.

Jeremy Allaire creates strategy as Chief Executive Officer of Circle and noted in a release, “Earning a New York trust charter has been a longstanding objective for Circle given the regulatory clarity that comes with it”. The new license allows the business to store user tokens safely and manage cash backing USDC under state law.

As a result, state approval strengthens the firm’s legal standing in the United States. However, good regulatory news was not enough to keep Circle stock price from falling during normal trading hours.

Investors Eye Circle’s August Earnings

However, Circle’s upcoming financial results remain the main focus for traders. The new state license builds on earlier national bank approvals, but upcoming quarterly figures will guide future price moves.

Still, Circle stays a leader in the crypto market, with total USDC token value holding above $71.8 billion. Investors will watch the August 5 report closely to see if real revenue matches lower Wall Street targets.

Finally, Circle stock price faces a major test as earnings day gets closer. Keeping Circle stock price above $60 remains key for investors looking to stop further drops.

Is Circle a Good Stock to Buy?

Circle stock (CRCL) carries a Moderate Buy consensus, based on 18 analyst ratings over the past three months. Out of those, 10 call it a Buy, seven recommend a Hold, and one suggests a Sell. The average 12-month CRCL price target sits at $112, which represents 88.8% upside potential from current levels. (See CRCL stock forecast)