TD Cowen raised its price target on Strategy (MSTR) to $395 from $385 on Thursday, arguing the company’s increased use of STRC perpetual preferred issuance makes its bitcoin accumulation strategy more capital-efficient than the market currently appreciates.
The revision — by analysts Lance Vitanza and Jonnathan Navarrete — carries an implied upside of more than 110% from Strategy’s closing price of $186.82 on Wednesday.
Notably, TD Securities has an investment banking relationship with Strategy, having managed or co-managed a public offering for the company within the past 12 months.
STRC thesis
The core of the updated thesis is a capital structure pivot.
Strategy has been leaning more heavily on STRC to fund bitcoin purchases while pulling back on common equity issuance.
STRC is Strategy’s variable-rate perpetual preferred stock, currently yielding 11.5%, and sits at the core of Michael Saylor’s 42/42 plan, a three-year capital-raising roadmap targeting $42 billion through equity and an equal amount through fixed-income instruments.
With more than $8.5 billion in face value outstanding, it has become the dominant engine of that fixed-income sleeve, funneling proceeds from yield-seeking income investors directly into the firm’s bitcoin treasury.
TD Cowen argued the market underestimates how much that shift can expand the firm’s BTC Yield, its key metric for measuring non-dilutive bitcoin accumulation per diluted share, over time.
A clarification on Strategy’s breakeven multiple adds weight to that argument. The firm’s breakeven mNAV sits at approximately 1.22 times, not 1.0 times as some investors have assumed, according to the note. Issuing common equity below that threshold is dilutive to existing shareholders.
The analysts argued that this strengthens the strategic rationale for preferred issuance as the primary funding vehicle.
BTC Yield
The note also revised BTC Yield estimates upward to 18.2% for fiscal 2026 from a prior forecast of 16.7%, and to 9.6% for fiscal 2027 from 5.4%. Estimated BTC dollar gains for 2026 rose to $13.9 billion from a prior estimate of $12.7 billion, according to the bank.
BTC Yield is Strategy’s proprietary key performance indicator measuring the percentage change in bitcoin holdings per fully diluted share over a given period.
Rather than yield in the traditional fixed-income sense, it’s a gauge of how efficiently the company is accumulating bitcoin relative to the dilution created by issuing new shares to fund those purchases.
A rising BTC Yield signals the firm is adding bitcoin faster than it is diluting existing shareholders. A negative reading, as in the fourth quarter of 2025, means the reverse.
TD Cowen also pushed back on what it 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, the analysts wrote.
Modest bitcoin appreciation would be sufficient to cover that dividend burden while preserving the firm’s accumulation strategy, in their view.
The note also acknowledged a scenario in which dividends are partly funded through bitcoin sales, which Saylor has hinted at, and argued that Strategy would remain a net accumulator, provided STRC issuance continues at pace.
Strategy raised more than $2 billion in STRC during the first quarter of 2026 and more than $5 billion year to date, per the note — a figure corroborated by the company’s own first-quarter results, which reported $5.58 billion raised through the instrument as executives called it a “big success,” The Block reported.
TD Cowen’s base case assumes bitcoin reaches approximately $140,000 by the end of 2026, with bitcoin acquisition running at roughly $4 billion per quarter.
Additionally, the upside scenario puts bitcoin at around $175,000 by year-end, with acquisitions exceeding $5 billion per quarter. The firm stated the implied upside of more than 100% from current levels may appear out of context, but argued it represents a reasonable outcome over a 12-month horizon given the embedded leverage to bitcoin price movements.
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