Benchmark Equity Research has reaffirmed its buy rating on Strategy, maintaining a $570 price target after the company introduced a new digital credit capital framework aimed at strengthening balance sheet flexibility. The target implies roughly 515% upside from Monday’s closing price of $92.68, when the stock gained 12.6%.
New capital framework expands flexibility
The five-part framework is designed to give Strategy more control over capital allocation during volatile market conditions. It allows the company to repurchase securities, selectively monetize its Bitcoin holdings, and reallocate resources as needed.
A central component is a $2.55 billion reserve, which can cover about 17.4 months of dividend obligations. The company also authorized $1 billion in common stock repurchases and another $1 billion in buybacks for preferred securities, including STRC, STRF, STRD, and STRK.
Bitcoin sale approval adds liquidity option
Strategy’s board has approved the potential sale of up to $1.25 billion in Bitcoin from its treasury of 847,363 BTC. This provides an additional liquidity lever if market conditions require it.
Benchmark noted that the authorized sale represents only a small portion of the company’s overall Bitcoin holdings. The firm previously sold 32 BTC in May as part of routine liquidity management.
Focus on controlling dilution and issuance
According to Benchmark’s research note, the framework allows Strategy to pause new share issuance when its equity trades below internal valuation benchmarks. At the same time, it enables the company to execute share sales or buybacks depending on market conditions.
Each part of the plan is tied to specific capital management goals, including setting clearer guidelines for future issuance, addressing dilution concerns, and adjusting dividend commitments tied to preferred securities. The reserve and repurchase programs are intended to support stability during periods of market stress.
Framework follows sharp decline in securities
The announcement comes after a difficult stretch for Strategy’s securities. The company’s common shares fell about 30% over the past week, while its STRC preferred instrument, structured to trade near its $100 par value, dropped below $80.
Benchmark’s reaffirmed rating suggests the firm sees the new framework as a stabilizing step that could improve how traders assess Strategy’s capital strategy and long-term positioning.
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