Citi Starts Coverage of Circle With Buy Rating, Sees 34% Upside Potential

Citigroup has initiated coverage of Circle (CRCL), highlighting the company’s strong position to drive stablecoin adoption. In a research note released Monday, Citi analysts assigned the stock a Buy rating with a High Risk designation and set a price target of $243 — implying roughly 34% upside from Monday’s closing price of just above $181.

Despite Circle’s significant run-up since going public, Citi believes the company’s valuation remains reasonable. Circle debuted on the public markets at $31 per share and climbed to an all-time high of $299 last week before retreating to current levels.

Stablecoins — digital assets pegged to the value of traditional currencies like the U.S. dollar or commodities such as gold — serve crucial roles in crypto markets, including facilitating trading and enabling cross-border payments.

Citi’s analysts, led by Peter Christiansen, cited several factors supporting Circle’s long-term potential: scarcity value, a “winner takes most” dynamic, substantial addressable market opportunities, favorable legislative developments, and significant operating leverage.

“The key competitive advantage for Circle is its neutrality,” the report noted. “Defending against stablecoin fragmentation and maintaining best-of-breed status will be essential.”

Thanks to Circle’s lean capital requirements and high operating leverage, the bank sees the company well-positioned to generate excess returns if it captures a significant share of the growing stablecoin market.

However, not all Wall Street firms share Citi’s optimism. Rival bank JPMorgan started coverage of Circle on Monday with an Underweight rating, citing concerns over the stock’s valuation.