Strategy has received another Wall Street price target cut after Canaccord lowered its valuation on the company while maintaining that Bitcoin’s long-term investment case remains intact.
Summary
- Canaccord cut Strategy’s price target to $130 but said its long-term Bitcoin investment thesis remains unchanged.
- The brokerage believes Strategy’s Bitcoin-focused business model is still viable if Bitcoin posts moderate annual gains.
- Other analysts, including TD Cowen, Cantor Fitzgerald, and Benchmark, continue backing Strategy despite lowering or maintaining price targets.
Bitcoin outlook remains intact despite lower valuation
According to a research note from Canaccord, the brokerage reduced its price target for Strategy to $130 from $163, citing the company’s prolonged share price decline rather than any change in its long-term view on Bitcoin. The revision comes as Strategy stock has struggled for months, even though the firm said its underlying investment thesis for the cryptocurrency remains unchanged.
Strategy shares closed the previous trading session at $86.93, only slightly above their 52-week low of $81.81 and roughly 77% below where they traded a year ago. The stock later rebounded 8.12% to $93.96 after the company introduced its new Digital Credit Capital Framework.
Canaccord said Bitcoin continues to benefit from limited supply and growing adoption of blockchain technology. The brokerage added that the cryptocurrency has become more established within financial markets and is no longer facing the same uncertainty over whether it should be viewed primarily as a speculative asset or a long-term store of value.
The firm also maintained that Strategy’s Bitcoin-focused corporate model remains workable as long as Bitcoin delivers moderate annual appreciation. At the same time, Canaccord acknowledged that recent market performance has fallen short of those expectations.
“We think there is nothing broken here, either in the company’s model or in bitcoin, which suggests a pendulum swing back makes sense sometime over the medium term.”
Separately, data cited in the report showed Strategy’s Relative Strength Index has moved into oversold territory, while Fair Value analysis suggested the shares could be trading below their estimated intrinsic value.
Capital strategy continues to receive support from analysts
The latest revision follows another recent target cut from TD Cowen, which, as previously reported by crypto.news, lowered its price target on Strategy to $260 from $400 while keeping a “buy” rating. According to TD Cowen, the lower valuation was driven by a more conservative long-term Bitcoin price forecast rather than concerns about Strategy’s newly introduced Digital Credit Capital Framework.
TD Cowen said its revised target still implies roughly 200% upside from current trading levels. The brokerage also described the new capital framework as a constructive step that could improve Strategy’s financial flexibility, even after the stock surrendered part of its initial gains following the announcement.
In a regulatory filing dated June 29, Strategy disclosed that its Digital Credit Capital Framework allows the company to raise up to $1.25 billion through Bitcoin sales if needed. According to the filing, those proceeds may be used to maintain U.S. dollar reserves, fund preferred dividend payments, meet interest obligations, strengthen cash balances, and finance future share repurchases.
The same filing also authorized up to $1 billion in repurchases of the company’s Digital Credit Securities, including STRC, STRF, STRD, and STRK, when management determines buybacks would improve the firm’s capital structure. Strategy further disclosed that it has paused additional Bitcoin purchases while selling about $1.15 billion worth of MSTR shares as part of its capital management plan.
Elsewhere on Wall Street, Cantor Fitzgerald reaffirmed its Overweight rating and $212 price target, citing confidence in Strategy’s liquidity plans. Benchmark also reiterated its Buy rating and maintained its $570 price target, noting that although the company’s preferred shares have weakened in recent months, Strategy has continued adding Bitcoin to its balance sheet.
