TD Cuts Bitcoin Giant Strategy's Price Target, Calls Ethereum Treasury Sharplink a ‘Buy’
TD Cowen analysts initiated coverage of Sharplink with a “buy” rating on Thursday, while reducing their price target for Bitcoin treasury giant Strategy. The analysts, led by Lance Vitanza, penciled in a $16 price target for Sharplink shares, which change hands under the ticker SBET on the Nasdaq. The company’s stock price has fallen 62% over the past six months.
Unlike crypto-buying firms dedicated to Bitcoin, Sharplink has shaped itself as an operating company that’s able to grow its digital assets stockpile through staking, the process through which entities participating in the process of validating transactions can earn Ethereum rewards.
Although several Ethereum exchange-traded funds have debuted in the U.S. that offer staking, TD analysts said Sharplink’s ability to increase the amount of Ethereum that it holds per share should lead the company to outperform spot Ethereum ETFs over time. Last month, Sharplink reported that revenue from staking jumped 50% quarter-over-quarter to $15.3 million. Consensys CEO and Ethereum co-founder Joe Lubin, who serves as Sharplink’s Chairman, said the firm’s strategy yields a “virtuous cycle of accumulation.”
Meanwhile, TD analysts trimmed their price target for Strategy, which holds over $55 billion worth of Bitcoin, to $178 from $185 per share. On Thursday, Strategy’s stock price edged up to nearly $129, according to Yahoo Finance. Earlier this year, the investment bank trimmed its price target for the Tysons Corner, Virginia-based firm. TD Cowen analysts said the updated price target reflects a lower multiple on the company’s projected cash flow from its legacy software business. Despite the trim, the investment bank maintained a “buy” rating for the company, saying it remains the “best-leveraged play” on Bitcoin's long-term price appreciation. Strategy’s Bitcoin holdings have grown substantially as the digital asset’s price climbed this year, following the firm's announcement of a multi-billion dollar plan to acquire more of the leading cryptocurrency.
