Svmuu News: Wall Street investment bank TD Cowen has lowered its price target for Strategy, a publicly traded company in which Bitcoin holds a stake, from $400 to $260,a reduction of approximately 35%, but maintained its “Buy” rating. The firm also noted that the company’s newly launched digital credit capital framework is constructive and continues to improve credit transparency and capital flexibility.
Analysts explained that this valuation reduction is unrelated to the new capital framework; the core reason is a downward revision of Bitcoin’s price forecasts: the BTC price forecast for the end of 2026 was lowered from $140,000 to $100,000, and the forecast for the end of 2027 was lowered from $190,000 to $135,000.Even after the adjustment, the $260 target price still represents an upside of over 200% relative to the closing price of $92.68, and the investment bank admitted that this valuation gap appears somewhat high.
In terms of capital, Strategy has now rebuilt its reserves to $2.55 billion; the issuance of 12 million additional common shares last week did not result in an increase in holdings of Bitcoin. Current cash reserves can cover more than 17 months of interest and preferred stock dividends, and when combined with the proceeds from liquidating BTC, they can cover 26 months of expenses.The company has been approved to repurchase $1 billion each of common and preferred stock, marking a shift from one-way share issuance to proactive capital structure optimization;$1.25 billion in proceeds from the liquidation of Bitcoin will replenish cash reserves, and the preferred stock dividend has been raised from 11.5% to 12%, alleviating the previous significant discount of 26%. (TheBlock)