TD Cowen lowered its price target on the strategy by about 35% to $260 from $400, maintaining a Buy rating and describing the company’s newly announced digital credit capital framework as “incrementally constructive” for credit visibility and capital flexibility.
Analysts led by Lance Vitanza and Jonnathan Navarrete made it clear that the target cut stemmed from their revised Bitcoin (BTC) price forecast rather than Strategy’s framework announcement on Monday.
TD Cowen’s price target implies an upside of more than 200% from Strategy’s $92.68 closing price on Monday, a gap that analysts acknowledged “may seem out of context” given the scale of the move needed. TD Cowen also expects Bitcoin to reach around $100,000 by the end of 2026, up from previous estimates of around $140,000, and around $135,000 by the end of 2027, up from $190,000.
The bank kept its forecast for the number of Bitcoins the strategy would acquire intact and kept the revenue multiple steady at 3x.
USD reserves were rebuilt to $2.55 billion.
According to the note, the framework of the strategy includes a USD reserve policy approved by the Board of Directors, a revised STRC dividend approach, buyback authorization for preferred and common shares, and a formal Bitcoin monetization program.
TD Cowen said the announcement codifies dynamics the company had already modeled in its May 7 note, including selective use of preferred stock-led financing and Bitcoin sales to support dividend payments while maintaining net accumulation over time.
Analysts said Strategy’s USD reserves have been fully rebuilt to $2.55 billion after the company issued more than 12 million shares of common stock while buying zero bitcoin last week.
TD Cowen said the move was a step toward restoring investor confidence in the company’s ability to overcome the prolonged Bitcoin downturn. The company is now targeting a minimum reserve equivalent to at least 12 months of preferred dividends and interest expenses, with current coverage exceeding 17 months or approximately 26 months, including approved Bitcoin monetization capacity.
Shift to Two-Way Capital Allocation
The strategy authorized up to $1 billion in preferred stock repurchases and up to $1 billion in MSTR share repurchases, in what TD Cowen described as a shift from unilateral share issuances to active capital structure optimization.
Analysts said this introduces a potential mechanism for companies to arbitrage price movements across their capital stack. However, implementation depends on market conditions and management discipline.
According to the note, potential revenue from the Bitcoin monetization program will be capped at $1.25 billion, with proceeds earmarked for USD reserves.
TD Cowen said the program does not represent a strategic change, as the Strategy already assumed it would make selective Bitcoin sales to support dividends when appropriate. Instead, the framework formalizes flexibility with equity issuance and preferred financing as explicitly authorized and limited capital instruments.
STRC dividend increase to stabilize discount
Regarding STRC in particular, TD Cowen said the new 12% dividend rate, up from 11.5%, reinforces that the security is not functioning purely as a funding vehicle, but is actively managed as a means to fix the trading price near the $100 par value.
The Block called the bank’s changes a “somewhat positive step” toward improving price stability and investor confidence in preferred stocks. Preferred shares have traded as much as 26% below par in recent weeks due to the decline in the price of Bitcoin, The Block reported.
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