Bernstein reiterates Outperform on Circle, keeps $140 target after Q2 2026 results

Bernstein reiterated its Outperform rating on Circle and maintained a $140 price target after the company reported second-quarter 2026 results that beat profit expectations even as revenue came in slightly below forecasts. Circle posted $701 million in revenue, up 7% from a year earlier, along with $48 million in net income and earnings per share of $0.18, both ahead of consensus estimates. Bernstein said investor concerns about rising stablecoin competition and the risk of lower reserve income if interest rates fall do not fully capture Circle's distribution network, regulatory position and expanding business model. The firm pointed to the planned Sept. 16 launch of Arc's public mainnet, saying current market estimates may not reflect potential future revenue from gas fees, staking, ecosystem partnerships and about $180 million in Arc token presales expected to be recognized in 2026. Bernstein also highlighted raised 2026 guidance for revenue outside reserve income and improved expectations for revenue-less-distribution-cost margins, while noting Circle's progress on a national trust bank approval and the Circle Payments Network. Reserve income still accounted for about 95% of total revenue, and USDC circulation reached $73.3 billion, down 5% from the prior quarter but up 19% from a year earlier. Mizuho separately noted sequential declines in USDC circulation, a 31% drop in on-chain transaction volumes from the previous three months and continued margin pressure in parts of the business. Circle shares traded lower ahead of Thursday's market open after closing the previous session near $63, leaving the stock down roughly 20% since the start of the year.