TD Cowen cuts MicroStrategy’s price target to $260, but characterizes its new capital framework as “constructive”.

Wall Street investment bank TD Cowen has cut its price target for Bitcoin-focused firm Strategy (STRC) from $400 to $260, a roughly 35% reduction, while retaining its "Buy" rating. The firm described the digital credit capital framework unveiled by the company on Monday as a "gradual positive" for credit visibility and capital flexibility. Analysts clarified that the target cut stems primarily from adjustments to Bitcoin price forecasts, not the framework itself. TD Cowen lowered its end-2026 Bitcoin price projection from ~$140,000 to ~$100,000, and its end-2027 forecast from $190,000 to ~$135,000. The $260 price target still implies over 200% upside from Strategy’s Monday closing price of $92.68, a gap analysts admit "may appear unrealistic." Regarding the new framework, Strategy has rebuilt its U.S. dollar reserves to $2.55 billion. The company issued over 12 million common shares in the past week and did not purchase any Bitcoin. TD Cowen said this move helps restore investor confidence in the company’s ability to weather long-term Bitcoin downturns. Current reserves cover more than 17 months of minimum preferred stock dividend and interest obligations; adding the authorized Bitcoin monetization capacity brings that coverage to roughly 26 months. The firm also approved up to $1 billion in preferred stock repurchases and $1 billion in common stock repurchases. TD Cowen noted this marks a shift for Strategy from one-way share issuance to active capital structure optimization. The Bitcoin monetization plan is capped at $1.25 billion, with proceeds earmarked to replenish U.S. dollar reserves. Additionally, STRC’s preferred stock dividend rate was raised from 11.5% to 12% to stabilize its trading price near its $100 par value. The security recently traded at a 26% discount to par due to Bitcoin’s price decline.