- TD Cowen has initiated coverage of Ethereum treasury firm Sharplink with a “buy” rating, setting a $16 price target.
- The firm also reiterated a “buy” for Bitcoin giant Strategy while lowering its price target to $350 from $440.
- Analysts highlighted that Sharplink’s Ethereum staking rewards could fully cover its operating costs even if ETH’s price remains low.
- Sharplink’s staking revenue jumped 50% quarter-over-quarter to $15.3 million, though it reported a full-year loss of $734 million.
Investment bank TD Cowen issued a pair of bullish crypto stock ratings on Thursday, initiating coverage on Sharplink with a “buy” while also reaffirming its positive view on Bitcoin-holding Strategy. According to reports, analysts led by Lance Vitanza set a $16 price target for Sharplink, whose shares traded around $6.42 in after-hours trading, according to Yahoo Finance.
Unlike pure Bitcoin treasury plays, Sharplink operates as a company that grows its Ethereum holdings through staking rewards. Consequently, analysts argued the firm generates a “superior staking yield” compared to Ethereum ETFs that charge management fees.
Sharplink’s ability to increase its Ethereum per share should let it outperform staking ETFs in a favorable market. However, the analysts noted that its staking revenue could “fully cover operating costs” even if ethereum’s price stays depressed.
The company’s staking revenue surged 50% last quarter to $15.3 million. Meanwhile, the firm disclosed a massive $734 million annual loss, driven by a decline in its Ethereum holdings’ value in the latter half of the year.
Simultaneously, TD Cowen trimmed its price target for Bitcoin-focused Strategy to $350. However, it maintained a “buy” rating for the firm, which holds over $55 billion worth of Bitcoin.
The lowered target reflects a reduced multiple on projected Bitcoin gains and lower future price expectations. Strategy’s stock price edged up to nearly $129 on Thursday, according to Yahoo Finance.
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