Bank of America upgraded its rating on Coinbase shares to buy from neutral and left is price target unchanged at $340.
- Bank of America, in a note on Thursday, cited increasing signs of revenue diversification beyond just retail crypto trading, a trend that it thinks will accelerate this year.
- The bank forecasts subscription and services revenue will increase to 16% of Coinbase’s total revenue in 2023 from 12% in the third quarter of 2021.
- The trend will be driven by a combination of offerings such as staking, earn campaign, Coinbase’s non-fungible token platform and decentralized finance products such as DeFi yield, the report said.
- Scaling of these non-trading revenue streams could also lead to increased interest in the stock from institutional investors, Bank of America noted.
- Uncertainty around regulation remains a potential risk, but Coinbase’s “technology/innovation and brand are positive differentiators,” the report added. The bank also sees potential upside to the company’s fourth-quarter guidance.
- Coinbase shares rose 1% in pre-market trading on Thursday.
Read more: Coinbase Offers Access to DeFi Yields With DAI and Compound