Investment bank TD Cowen has reduced its one-year price target for MicroStrategy (formerly known as Strategy) from $500 to $440, citing a weaker outlook for bitcoin yield due to dilution from continued equity and preferred stock issuance. The analysts, led by managing director Lance Vitanza, now expect MicroStrategy to acquire approximately 155,000 bitcoins in fiscal year 2026, a significant increase from their prior estimate of 90,000.
The key concern is the dilution of bitcoin yield, defined as the percentage change in bitcoin held per fully diluted share. For FY26, the analysts now model a 7.1% BTC Yield, down from their prior 8.8% estimate and a substantial drop from the 22.8% yield for FY25. This translates to a projected BTC $ Gain of $6.315 billion for FY26, compared to a prior estimate of $9.4 billion. The $440 price target is based on an unchanged 5x multiple applied to this reduced gain figure.
Despite the near-term dilution, the analysts expect a reversal in fiscal 2027, with bitcoin yield accelerating to 8.1% and BTC $ Gain rising to over $13.5 billion. They attribute this projected improvement to higher expected bitcoin prices improving the accretion profile of future purchases.
MicroStrategy has remained aggressively acquisitive during the recent bitcoin price pullback. In the week ended January 11, the company issued about 6.8 million shares of common stock and roughly 1.2 million shares of its variable-rate STRC preferred stock, raising approximately $1.25 billion. Nearly all of these proceeds were used to purchase an additional 13,627 bitcoins.
The analysts noted that because these latest purchases were funded largely through equity issued close to parity, the transactions generated scant bitcoin yield. "The move only makes sense if bitcoin prices recover meaningfully," they wrote, adding they believe this is likely given increasingly favorable macro and regulatory factors.
Looking ahead, TD Cowen expects MicroStrategy to continue aggressively issuing equity and preferred securities as long as bitcoin prices remain depressed. Their long-term bitcoin price forecasts remain bullish: approximately $177,000 by December 2026 and $226,000 by December 2027.
Despite the lowered price target, the analysts maintained a constructive view on MicroStrategy as a vehicle for bitcoin exposure. They highlighted opportunities across the company's capital structure, including all five tranches of preferred stock. Specifically, they pointed to the senior STRF preferred shares, which they said imply a potential internal rate of return of around 30% based on yield compression and fixed dividends.
The report also addressed recent regulatory developments, noting that MSCI decided not to proceed with excluding bitcoin treasury companies like MicroStrategy from its indexes for now. While describing this as a positive near-term development, the analysts cautioned about longer-term uncertainty, suggesting that large asset managers like BlackRock—which derive significant revenue from bitcoin ETPs—might view public bitcoin treasury companies as competitors, potentially influencing future index decisions.
