Merrill Lynch Upgrades Coinbase to Buy, Sees Strong Growth Potential

Product Expansion and Strategic Moves Drive Upgrade

Merrill Lynch has upgraded Coinbase's stock rating to Buy, highlighting accelerated product development, strategic shifts, and a more attractive valuation as key drivers.

Although Coinbase shares have fallen around 40% from their July peak, the firm sees improving momentum in product development for the second half of the year.

• Coinbase is expanding into stocks, ETFs, and prediction markets at a faster pace.
• Its Layer 2 network, Base, is seen as a foundational infrastructure for future growth.
• The Coinbase Tokenize initiative could serve as a major catalyst for tokenizing real-world assets (RWA).

Valuation Appeal and Long-Term Outlook

With the current price-to-earnings ratio down about 40% from mid-2024 levels, Merrill Lynch maintains its $340 price target, implying about 38% upside potential.

Analysts believe Coinbase is well-positioned to maintain industry leadership through 2026 and lead in emerging market segments.