Wells Fargo analyst Jared Shaw double downgraded Silvergate Capital to Underweight from Overweight with a price target of $70, down from $115. The growth outlook for Silvergate as a pure-play crypto banking solution is “significantly limited in the current environment,” Shaw tells investors in a research note. The company is seeing volume reductions in its Silvergate Exchange Network, which is its genesis for growth and profitability, says the analyst. He adds that while Silvergate is among the most asset-sensitive banks, balance sheet uncertainty from deposit outflows due to depressed crytpocurrency values “more than offset the benefits from higher rates.” Shaw sees continued balance sheet pressure for Silvergate and believes this is not priced into the shares.
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