Strategy (MSTR) Stock: TD Cowen Cuts Price Target as Bitcoin Yield Outlook Weakens

TLDR

• TD Cowen lowered Strategy’s price target from $500 to $440, citing weaker bitcoin yield outlook due to increased equity dilution
• Strategy purchased 13,627 bitcoins for $1.25 billion last week despite recent price weakness, bringing total holdings to 687,410 bitcoins
• The company’s stock rose 5.6% as bitcoin topped $95,000, but remains down 62% from its July 2024 peak
• Bitcoin yield expected to drop to 7.1% in fiscal 2026 from 22.8% in fiscal 2025 due to aggressive equity issuance
• MSCI announced it won’t exclude bitcoin treasury companies from its indexes, providing near-term relief for Strategy investors

Strategy stock jumped 5.6% to $182.71 as bitcoin climbed above $95,000 for the first time since November. The rally marks a positive turn for the bitcoin treasury company, though shares remain down 62% from their July 2024 high.

Strategy Inc, MSTR

TD Cowen analysts reduced their one-year price target on Strategy to $440 from $500. The cut reflects concerns about dilution from the company’s aggressive equity and preferred stock issuance.

The firm expects Strategy to acquire around 155,000 bitcoins in fiscal year 2026, up from a prior estimate of 90,000. However, this faster pace comes with a catch. The purchases will be funded with more common and preferred equity rather than debt.

Lance Vitanza and his team at TD Cowen now project bitcoin yield of just 7.1% for fiscal 2026. That’s down from their previous 8.8% estimate and well below the 22.8% achieved in fiscal 2025. Bitcoin yield measures the percentage change in bitcoin held per fully diluted share.

The lower yield translates to a BTC dollar gain of $6.315 billion for fiscal 2026, compared to $9.4 billion in prior estimates. TD Cowen maintained its 5x multiple on this figure to arrive at the new $440 target.

Strategy hasn’t backed away from buying during bitcoin’s recent price weakness. Over the week ended January 11, the company issued roughly 6.8 million shares of common stock and 1.2 million shares of STRC preferred stock. The $1.25 billion raised went toward purchasing 13,627 additional bitcoins.

The company now holds 687,410 bitcoins worth more than $65 billion at current prices. Strategy founder Michael Saylor has continued to lean into the market dip rather than slowing treasury operations.

Aggressive Buying Strategy Raises Questions

The recent purchases generated minimal bitcoin yield because they were funded largely through equity issued near parity with bitcoin prices. TD Cowen analysts noted this approach only works if bitcoin prices recover meaningfully.

The firm believes such a recovery is likely. They cite increasingly favorable macro and regulatory factors, including the Senate Banking Committee’s consideration of the Digital Asset Market Clarity Act on Thursday.

TD Cowen continues to model bitcoin reaching around $177,000 by December 2026 and approximately $226,000 by December 2027. They expect yield dynamics to reverse in fiscal 2027, with bitcoin yield accelerating to 8.1% and BTC dollar gain rising above $13.5 billion.

Index Inclusion Provides Relief

MSCI announced earlier this month it won’t exclude bitcoin treasury companies like Strategy from its indexes. TD Cowen described this as a positive near-term development, though long-term uncertainty remains.

The analysts expressed concern that major MSCI customers like BlackRock might view bitcoin treasury companies as competitors to their spot bitcoin ETPs. BlackRock’s bitcoin products represent its largest revenue source, and the firm accounts for 10.2% of MSCI’s fiscal 2024 revenue.

Strategy’s stock is up around 20% year-to-date while bitcoin has gained 9.7% in 2026. The company trades at just a 10% premium to its bitcoin holdings, down from approximately 100% in summer 2024.

The stock hit a 52-week high of $457.22 in July 2024 when bitcoin traded around $122,000. Bitcoin currently sits 24% below its October record high above $126,000.

Other digital assets rallied alongside bitcoin, with Ethereum and XRP posting gains. Coinbase stock rose 2% after a 4% jump Tuesday as the positive sentiment spread to exchange platforms.

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