TD Cowen raises Strategy price target to $395 on shift toward STRC issuance and improved BTC Yield outlook

TD Cowen has raised its price target for Strategy (MSTR) to $395, an increase from $385, driven by the company's greater reliance on STRC perpetual preferred stock issuance for bitcoin accumulation. Analysts believe this strategy is more capital-efficient than the market currently recognizes, offering an implied upside of over 110% from Strategy's recent closing price. The core of this revised thesis is Strategy's pivot in capital structure, favoring STRC over common equity issuance to fund bitcoin purchases. STRC, a variable-rate perpetual preferred stock yielding 11.5%, is a key component of Michael Saylor's capital-raising plan. TD Cowen argues that the market underestimates the positive impact of this shift on Strategy's BTC Yield, a metric measuring non-dilutive bitcoin accumulation per diluted share. The firm also clarified that Strategy's breakeven multiple is approximately 1.22 times, not 1.0 times, reinforcing the strategic advantage of preferred issuance. Furthermore, TD Cowen revised its BTC Yield forecasts upward, projecting 18.2% for fiscal 2026 and 9.6% for fiscal 2027, with estimated BTC dollar gains also increasing. The analysts also addressed concerns about Strategy's preferred structure acting as a "perpetual dilution machine," noting that modest bitcoin appreciation could cover dividend obligations, and even partial funding through bitcoin sales would still allow Strategy to be a net accumulator.

(Source：The Block)