TD Cowen cut its price target on Strategy Inc. (NASDAQ: MSTR) to $260 from $400 after lowering its year-end Bitcoin forecast to $100,000.
The Cut Comes From Bitcoin's Outlook, Not Monday's New Framework
Analysts Lance Vitanza and Jonnathan Navarrete made clear the target reduction stems entirely from TD Cowen's revised Bitcoin forecast rather than Strategy's capital framework announcement.
The bank now projects Bitcoin reaching roughly $100,000 by the end of 2026 and $135,000 by the end of 2027, both sharply lower than prior estimates of $140,000 and $190,000.
TD Cowen left its projections for how many Bitcoin Strategy will acquire unchanged and kept its earnings multiple steady at 3x, meaning the lower target reflects Bitcoin's trajectory alone, not any doubt about Strategy's accumulation strategy.
TD Cowen Calls Strategy's New Capital Plan 'Incrementally Constructive'
The bank described Strategy's framework as largely codifying dynamics it had already modeled in a May 7 note, including preferred-led financing and selective Bitcoin sales to support dividends while maintaining net accumulation over time.
Strategy rebuilt its USD reserve to $2.55 billion after issuing more than 12 million shares of common stock last week while buying zero Bitcoin.
TD Cowen called that move a step toward restoring investor confidence in Strategy's ability to weather an extended downturn.
The firm now targets a minimum reserve covering at least 12 months of dividends and interest, with current coverage exceeding 17 months.
Buyback Authorization Lets Strategy Arbitrage Its Own Capital Stack
Strategy authorized up to $1 billion in preferred stock repurchases and another $1 billion in MSTR buybacks, a shift TD Cowen framed as moving from one-way share issuance toward active capital structure management.
The analysts said this creates a potential mechanism for Strategy to exploit pricing dislocations across its capital stack.
The Bitcoin monetization program caps potential sales at $1.25 billion, with proceeds earmarked specifically for the USD reserve.
TD Cowen said this doesn't represent a strategic pivot, since the firm already assumed Strategy would make selective Bitcoin sales when needed.
STRC's Dividend Hike Targets Its Trading Discount Directly
TD Cowen said raising STRC's dividend rate to 12% from 11.5% reinforces that the security is being actively managed to anchor its price near $100 par value.
The bank called the change a modestly positive step toward stabilizing a preferred stock that has traded as much as 26% below par in recent weeks.
MSTR Gave Back Monday's Entire Rally On Tuesday
MSTR closed up 12.6% to $92.68 Monday before dropping 6% Tuesday, erasing a chunk of that gain.
The stock trades 53% below its 200-day moving average, with the October 2025 death cross still firmly intact.
RSI sits at 29.70, putting MSTR in oversold territory just above its 52-week low. Reclaiming the 20-day SMA at $112.65 marks the first ceiling for any bounce attempt.
Losing the 52-week low at $81.81 opens fresh downside with no major support level below it.