Circle Valuation Is 'Outside Our Comfort Zone,' Initiate at Underweight: JPMorgan
The shares were trading 4.5% higher at around $189 at publication time.
Circle is well positioned, the bank said, and its USDC stablecoin has an "early-mover advantage," with growing use cases in payments.
"We think highly of the Circle management team and are confident in the outlook for outsized stablecoin and USDC growth," analysts led by Kenneth Worthington wrote.
Still, the analysts see the company's market capitalization as elevated, and initiated coverage with an underweight rating. The stock priced at $31 a share in its initial public offering (IPO), and hit a record high of $299 last Monday.
Other Wall Street analysts were not as bearish. Broker Bernstein initiated coverage with an outperform rating and a $230 price target, saying Circle was an "investor must-hold."
"CRCL is building a market-leading digital dollar stablecoin network, with a strong regulatory edge, liquidity headstart and marquee distribution partnerships," analysts led by Gautam Chhugani wrote.
Bernstein is also bullish about the wider stablecoin market, and expects total market cap to reach around $4 trillion in the next decade from $225 billion today.
Rival broker Canaccord Genuity started coverage of Circle with a buy rating and a $247 price target.
The firm's analysts view the issuer of USDC as "having many of the key attributes that could make it a long-term winner in this potentially very large and new market for truly digital money."
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