Morgan Stanley has lowered the target price for CRCL from $106 to $38

According to Wall St Engine, Morgan Stanley analyst James Faucette downgraded Circle (CRCL) from Equalweight to Underweight, with a target price reduced from $106 to $38.

In his comments, Faucette pointed out that the contraction in USDC scale exposes the sensitivity of Circle's reserve income, meaning that the revenue structure will tilt towards lower-margin transaction income. The firm has lowered its USDC scale assumptions for 2027 and 2028 by approximately 33% and 44%, respectively, resulting in GAAP EPS expectations that are about 3% and 20% lower than market consensus.

Tokenized money market funds and deposits threaten USDC balances and rates, and the economic structure of USYC is relatively weak; the scale of agentic payments remains negligible, with an average daily transaction volume of only $41,900, implying an average transaction amount of about $0.24. Open USD has introduced shared governance and reserve economic models, increasing the cost of maintaining USDC distribution.