Investment Bank Lowers Target on Bitcoin-Focused Company
TD Cowen has cut its 12-month price target on the Bitcoin-focused firm Strategy from $500 to $440, citing increasing equity dilution as the company continues to fund Bitcoin purchases through stock issuance.
Bitcoin Yield Forecast Slashes
Analysts project Strategy will acquire around 155,000 Bitcoin by FY2026—up from the previous estimate of 90,000. However, the aggressive buying pace comes at a cost, with Bitcoin yield projected to fall to 7.1%, down from 8.8%, and well below FY2025's 22.8%.
Equity Financing Near Book Value
Despite recent Bitcoin price weakness, Strategy accelerated its buying. In the week through January 11, it raised approximately $1.25 billion by issuing 6.8 million common shares and 1.2 million floating-rate preferred shares—nearly all of which was used to purchase 13,627 Bitcoin.
According to TD Cowen, the funding came at prices close to book value, offering minimal yield uplift. The analysts suggest such a strategy only makes financial sense if Bitcoin sees a significant price rebound.
Outlook: Yield Expected to Recover
While Bitcoin yield faces near-term pressure, TD Cowen forecasts a rebound to 8.1% by FY2027. The firm also maintains a bullish long-term outlook, projecting Bitcoin could reach $177,000 by the end of 2026 and climb to $226,000 by the end of 2027.