Is it a good time to buy mining stocks? Morgan Stanley believes Riot Platforms is expected to rise by 20% in the next 12 months
Is it a good time to buy mining stocks? Analysts at Morgan Stanley believe that Riot Platforms is expected to rise by 20% in the next 12 months. The rise in Bitcoin prices has benefited cryptocurrency miners, but Riot Platforms' stock price has dropped by nearly 20%. The emergence of spot Bitcoin ETFs has weakened the attractiveness of mining stocks. Despite the upcoming Bitcoin halving, investors' anxiety may affect mining stocks. Analysts are optimistic about Riot Platforms' industry-leading position and liquidity portfolio, upgrading its rating to "hold" with a target price of $15
According to the information from the Wise Finance APP, since the beginning of 2024, with the continuous rise in the prices of cryptocurrencies such as Bitcoin, cryptocurrency miners have also generally benefited. However, Riot Platforms (RIOT.US) has lagged behind its peers so far this year, with its stock price falling by nearly 20%. Analyst Reginald Smith from JP Morgan Securities believes this presents a buying opportunity.
For cryptocurrency miners like Riot Platforms, a major issue is the emergence of physically-backed Bitcoin ETFs. For years, mining stocks have been a direct representation of holding cryptocurrencies. The new physically-backed Bitcoin ETFs have now become a better choice as they are easier to invest in and provide investors with almost direct ownership of cryptocurrencies. This has somewhat diminished the appeal of mining stocks. Additionally, the upcoming Bitcoin halving, although entirely expected, may intensify investor anxiety, which could also have a certain impact on the performance of mining stocks.
Analyst Reginald Smith believes that the weakness in Riot Platforms' stock price provides an opportunity to acquire quality assets at a low price. In mid-March, he upgraded his stock rating for Riot Platforms from "Neutral" to "Buy", with a target price of $15, implying a 20% increase over the next 12 months.
The analyst stated: "We like Riot Platforms' unique industry-leading power contracts, scale, and liquidity portfolio, and believe that among the three largest liquidity-strong mining stocks listed in the U.S., Riot Platforms has the greatest relative upside potential."