Benchmark said the sell-off in altcoins triggered the decline in DeFi Technologies’ stock, and the weakness was further compounded by the publication of a negative opinion piece.
The broker reiterated its buy rating and C$3 price target.
The sell-off in DeFi Technologies’ (DEFI) stock looks overdone, and the shares now offer an attractive buying opportunity, Wall Street broker Benchmark said in a research report on Thursday, reiterating its buy rating.
Shares of the cryptocurrency exchange-traded product issuer (ETP), plummeted in recent days following steep declines in altcoins and a negative opinion piece in a crypto newsletter.
Benchmark’s analyst Mark Palmer wrote that the stock had gained more than 330% since the beginning of May; it then lost almost half of its value over two days before recovering much of that loss yesterday afternoon.
Most of the ETPs that DeFi offers are altcoin focused, and the slump in these tokens earlier in the week had a negative impact on the share price, Palmer said.
The pullback might be partially due to traders taking some profit off the table after the recent outsized rally, but the sell-off appears overdone, and the stock’s significant repricing offers an “attractive buying opportunity,” the report added.
Palmer reiterated his buy rating on the stock and a C$3 price target. The shares slipped as much as 17% in early trading on Thursday to around C$1.93 before rebounding near C$2, according to TradingView data.
“Volatility in the price of altcoins should not surprise anyone who has even a casual understanding of the dynamics of the crypto market,” Palmer wrote, adding that some weakness in the stock price due to the sell-off in these tokens was understandable.
DeFi has responded to the negative article published by CoinSnacks, describing it as a “misleading short and distort report,” the note added.
Read more: Bitcoin, Crypto-Related Stocks Are Ripe for Institutional Adoption: Bernstein
