Strategy (MSTR) Stock: TD Cowen Lowers Price Target to $440 on Yield Concerns

TLDR

• TD Cowen reduced Strategy’s price target to $440 from $500 due to declining bitcoin yield projections
• Strategy acquired 13,627 bitcoins for $1.25 billion last week, boosting total holdings to 687,410 bitcoins
• Stock climbed 5.6% as bitcoin crossed $95,000, but shares remain 62% below July 2024 peak
• Analysts project bitcoin yield will fall to 7.1% in fiscal 2026 from 22.8% in fiscal 2025
• MSCI decided against removing bitcoin treasury companies from its indexes

TD Cowen slashed its price target on Strategy to $440 from $500, pointing to a weaker bitcoin yield outlook. The investment bank’s concerns center on dilution from the company’s ongoing equity and preferred stock sales.

Strategy stock gained 5.6% to $182.71 as bitcoin pushed past $95,000 for the first time since November. The crypto rally lifted spirits, but the stock still trades 62% below its July 2024 high of $457.22.

Strategy Inc, MSTR

The company owns 687,410 bitcoins worth over $65 billion at current prices. That makes it the largest corporate holder of the cryptocurrency, and its stock price typically mirrors bitcoin’s movements.

TD Cowen analysts led by Lance Vitanza expect Strategy to buy approximately 155,000 bitcoins during fiscal 2026. That’s up from a previous estimate of 90,000. But here’s the problem: these purchases will rely more heavily on equity sales rather than debt.

This shift matters because it tanks bitcoin yield. The metric measures percentage change in bitcoin held per fully diluted share. Analysts now forecast just 7.1% bitcoin yield for fiscal 2026, down from 8.8% previously projected and far below the 22.8% achieved in fiscal 2025.

Aggressive Buying Continues Despite Price Weakness

Strategy hasn’t pumped the brakes during bitcoin’s recent slump. The company issued roughly 6.8 million common shares and 1.2 million STRC preferred shares during the week ended January 11. The $1.25 billion raised bought 13,627 additional bitcoins.

These purchases generated barely any bitcoin yield since the equity was issued close to parity with bitcoin prices. TD Cowen noted this strategy only pays off if bitcoin rebounds strongly.

The firm thinks that’s likely. They’re modeling bitcoin at around $177,000 by December 2026 and roughly $226,000 by December 2027. Favorable macro conditions and regulatory developments support this outlook, including Thursday’s Senate Banking Committee consideration of the Digital Asset Market Clarity Act.

Premium to Holdings Collapses

Strategy now trades at just a 10% premium to its bitcoin holdings. That’s a massive drop from the approximately 100% premium seen in summer 2024.

The company’s aggressive accumulation strategy has raised eyebrows. Founder Michael Saylor keeps buying even as prices dip, betting on a recovery that TD Cowen believes will materialize.

Bitcoin currently sits 24% below its October record high above $126,000. The cryptocurrency has gained 9.7% in 2026, while Strategy stock is up around 20% year-to-date.

MSCI provided some relief by announcing it won’t exclude bitcoin treasury companies from its indexes. TD Cowen called this positive for the near term but warned uncertainty persists.

The analysts expressed concern that major MSCI clients like BlackRock might view bitcoin treasury companies as threats to their spot bitcoin ETPs. BlackRock’s bitcoin products generate its largest revenue stream.

Other crypto assets rallied alongside bitcoin. Ethereum and XRP posted gains, while Coinbase stock rose 2% following a 4% jump Tuesday.

TD Cowen expects yield dynamics to reverse in fiscal 2027, with bitcoin yield accelerating to 8.1% and BTC dollar gain exceeding $13.5 billion.

The post Strategy (MSTR) Stock: TD Cowen Lowers Price Target to $440 on Yield Concerns appeared first on Blockonomi.