TD Cowen cuts Strategy target to $260, keeps Buy after capital plan
Benchmark reiterated a Buy on Strategy with a $570 target after the company’s new framework authorized up to $1.25 billion of Bitcoin sales, while some market critics questioned the move.
Analyst views on Strategy diverged after the company adopted a new capital framework. TD Cowen cut its price target to $260 from $400 while keeping a Buy rating, citing lower Bitcoin assumptions, while Benchmark Equity Research reiterated its Buy rating on Strategy’s Class A shares and maintained a 12-month $570 target. Strategy’s board-approved Digital Credit Capital Framework includes a 12% annual STRC dividend effective July 1, up to $1 billion of Class A common-stock buybacks, up to $1 billion of preferred-security repurchases, about $2.55 billion of U.S. dollar reserves, and authority to monetize up to $1.25 billion of Bitcoin to build reserves, meet preferred dividend obligations and service debt. The sale authority amounts to roughly 21,000 BTC, or about 2.5% of the company’s approximately 847,000 BTC holdings. Critics including Arca’s Jeff Dorman and Ripple CEO Brad Garlinghouse raised concerns about the plan.
- Digital Credit Capital Framework: Strategy’s capital management plan for reserves, dividends, buybacks, debt service and limited Bitcoin sales.
- STRC: Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, which carries a 12% annual dividend under the updated framework.
- price target: An analyst’s estimate of where a stock could trade over a set period.