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TD Cowen raised its price target on Strategy to $395 from $385 on Thursday, arguing that the company's accelerating STRC perpetual preferred issuance makes its bitcoin accumulation strategy more capital-efficient than the market currently prices in. The revision by analysts Lance Vitanza and Jonnathan Navarrete carries implied upside of more than 110% from Strategy's closing price of $186.84.
The core of the updated thesis is a capital-structure pivot. Strategy has been leaning more heavily on STRC, its variable-rate perpetual preferred currently yielding 11.5%, while pulling back on common equity issuance. With more than $8.5 billion in face value outstanding, STRC has become the dominant engine of Strategy's fixed-income sleeve under Michael Saylor's 42/42 plan — a three-year roadmap targeting $42 billion in equity and an equal amount in fixed income. The note sharpens an existing argument: Strategy's breakeven mNAV sits at approximately 1.22 times, not 1.0 times as some investors have assumed, so issuing common equity below that threshold is dilutive to existing shareholders — strengthening the case for preferred issuance as the primary funding vehicle.
Why it matters
TD Cowen also revised BTC Yield estimates upward to 18.2% for fiscal 2026 from a prior 16.7%, and to 9.6% for fiscal 2027 from 5.4%. Estimated BTC dollar gains for 2026 rose to $13.9 billion from $12.7 billion. BTC Yield, Strategy's proprietary KPI, measures the percentage change in bitcoin holdings per fully diluted share — a rising reading means the firm is accumulating BTC faster than it is diluting shareholders, a negative reading, as in Q4 2025, means the reverse.
The analysts pushed back on what they called an overstated investor concern that Strategy's preferred structure functions as a "perpetual dilution machine." At current levels, the firm's annual preferred dividend obligation of roughly $1.5 billion represents approximately 2.2% of the value of its 818,334 bitcoin treasury. Modest BTC appreciation would cover that dividend burden while preserving the accumulation strategy, in their view.
Frequently asked questions
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What is Strategy's new price target at TD Cowen?
TD Cowen raised its Strategy price target to $395 from $385 on Thursday, citing the company's accelerating STRC perpetual preferred issuance. The revision implies upside of more than 110% from Strategy's closing price of $186.84 on Wednesday.
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What is STRC and why does it matter for Strategy?
STRC is Strategy's variable-rate perpetual preferred stock, currently yielding 11.5%, and the dominant engine of its fixed-income capital-raising under Michael Saylor's 42/42 plan. With more than $8.5 billion in face value outstanding, it funds bitcoin purchases from yield-seeking income investors while reducing…
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What is BTC Yield and why did TD Cowen raise its forecast?
BTC Yield is Strategy's proprietary KPI measuring the percentage change in bitcoin holdings per fully diluted share — a rising reading means the firm is accumulating BTC faster than it dilutes shareholders. TD Cowen raised the FY26 estimate to 18.2% from 16.7% and FY27 to 9.6% from 5.4%, citing the capital-efficiency…
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Is Strategy's preferred structure a perpetual dilution machine?
TD Cowen called that concern overstated. The firm's annual preferred dividend obligation of roughly $1.5 billion represents approximately 2.2% of the value of its 818,334 bitcoin treasury — modest BTC appreciation would cover the dividend burden while preserving the accumulation strategy, in the analysts' view.
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What is TD Cowen's bitcoin price forecast in the note?
TD Cowen's base case assumes bitcoin reaches approximately $140,000 by the end of 2026 with acquisitions running at roughly $4 billion per quarter. The upside scenario puts BTC around $175,000 by year-end with quarterly buys exceeding $5 billion.
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