TD Cowen cuts Strategy price target to $260 on bitcoin forecast
In brief
- TD Cowen cuts Strategy price target 35% to $260 from $400 on lower bitcoin outlook
- Analyst maintains Buy rating, calls new capital framework incrementally constructive
- TD Cowen projects bitcoin reaches ~$100K by end of 2026, down from $140K
- Strategy framework includes $2.55B USD reserve rebuild, $1B buyback, 12% dividend
Bitcoin Forecast Drives Target Cut
TD Cowen's revised bitcoin projections underpin the target reduction. The firm now projects bitcoin will reach approximately $100,000 by the end of 2026, down from a prior estimate of roughly $140,000. For 2027, TD Cowen expects bitcoin around $135,000, down from $190,000.
Despite the lower price target, TD Cowen's projection implies more than 200% upside from Strategy's $92.68 closing price on Monday.
Capital Framework Details
Strategy's newly unveiled framework introduces several structural changes. The company has fully rebuilt its USD reserve to $2.55 billion and established a board-approved USD reserve policy targeting a minimum equal to at least 12 months of preferred dividends and interest expense.
The framework also raises the dividend rate on STRC preferred stock to 12% from 11.5%, and authorizes up to $1 billion in preferred stock repurchases and $1 billion in MSTR share buybacks. A formal bitcoin monetization program caps potential sales at $1.25 billion.
Recent activity reflects Strategy's capital allocation priorities. The company issued more than 12 million shares of common stock over the past week while purchasing zero bitcoins. The preferred stock has traded as much as 26% below par in recent weeks, a discount the new framework appears designed to address.
