TD Cowen has cut its price target for Strategy to $260 from $400, a reduction of about 35%, while keeping a Buy rating. The move follows a lowered bitcoin forecast for the end of 2026 to $100,000 from $140,000, with analysts saying the change reflects the revised outlook rather than the company’s latest capital framework update.
Despite the cut, the new target still implies more than 200% upside from Strategy’s recent closing price of $92.68.
Lower bitcoin outlook drives valuation reset
TD Cowen now expects bitcoin to reach roughly $135,000 by the end of 2027, down from a prior estimate of $190,000. The firm maintained its 3x earnings multiple and did not change its expectations for Strategy’s bitcoin acquisition plans.
Analysts emphasized that Strategy’s valuation remains closely tied to bitcoin’s projected price path. Even a moderately lower forecast for the cryptocurrency can significantly affect the company’s equity outlook.
Capital framework formalizes existing approach
Strategy’s newly approved Digital Credit Capital Framework introduces several measures, including a U.S. dollar reserve policy, changes to its STRC dividend, share repurchase authorizations, and a structured bitcoin monetization program.
According to TD Cowen, most of these steps formalize practices already incorporated into prior models. This includes the assumption that Strategy may sell limited amounts of bitcoin to meet dividend obligations while continuing its broader accumulation strategy.
Liquidity strengthened through reserve policy
The company’s U.S. dollar reserves have been restored to $2.55 billion after issuing more than 12 million common shares over the past week without purchasing additional bitcoin.
This reserve is designed to cover at least 12 months of preferred dividends and interest payments. Current liquidity can support about 17 months of obligations, or up to 26 months when factoring in potential bitcoin sales.
Share buybacks and monetization add flexibility
Strategy has authorized up to $1 billion in repurchases for both its common and preferred shares. Analysts say this gives the company flexibility to adjust its capital structure based on market conditions and pricing opportunities.
The bitcoin monetization program allows for up to $1.25 billion in potential asset sales, with proceeds intended to strengthen dollar reserves. TD Cowen noted this does not represent a strategic shift but rather a continuation of an already anticipated approach.
Dividend adjustment targets preferred stock stability
The dividend rate on Strategy’s STRC preferred security has been raised to 12% from 11.5%. The change aims to support the security’s market price, which had fallen as much as 26% below its $100 par value during recent bitcoin weakness.
Stock volatility highlights reliance on bitcoin
Strategy’s shares dropped about 41% in June, marking their worst monthly performance since 2022. The decline contrasts sharply with the upside implied by the new price target, underscoring ongoing volatility.
The latest revision from TD Cowen reinforces that Strategy’s performance remains heavily dependent on bitcoin. For traders, the company continues to function as a leveraged play on the cryptocurrency’s trajectory, where even modest forecast changes can drive significant swings in valuation.
For more on whether bitcoin can still climb, explore TD Cowen’s outlook in this detailed bitcoin forecast.
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