TD Cowen slashes MicroStrategy price target to $260! Still bullish on 'Buy' MSTR, praises new capital framework for resilience

As Bitcoin falls below $60k, Wall Street begins reassessing valuations of related concept stocks. Investment bank TD Cowen released its latest report today (30th), citing a "downward revision of Bitcoin price forecasts" as the reason to slash the target price for MicroStrategy (ticker: MSTR) to $260. However, analysts maintained a "Buy" rating and praised MicroStrategy's newly launched "Digital Credit Capital Framework" as constructive, effectively enhancing capital flexibility through a rebuilt $2.55 billion reserve and share repurchase plan.

(Previous Context: Real or Fake? A Family Fund Sells 25% of Micron Stock, Goes All-In on Plunging STRC MicroStrategy Preferred Shares)

(Background Supplement: MicroStrategy's mNAV Drops Below 1, Strategy Valued Below Its Own Bitcoin Holdings)

As Bitcoin (BTC) continues to consolidate at a low of $58,700, MicroStrategy (formerly MicroStrategy), the world's largest corporate holder of Bitcoin, is seeing its market valuation undergo a recalibration by Wall Street.

According to foreign media reports, investment bank TD Cowen released its latest research report today (30th), announcing a significant cut in the price target for MicroStrategy (MSTR) from the previous $400 to $260.

Revised Downward Bitcoin Long-Term Forecast, Target Price Still Implies Over 200% Upside

TD Cowen explicitly stated in the report that the reduction in the target price is not due to concerns about MicroStrategy's fundamentals but is directly linked to an adjustment in its macroeconomic outlook for Bitcoin. The bank revised its Bitcoin price forecast for the end of 2026 from $140k down to $100k; and for the end of 2027 from $190k down to $135k.

Despite the sharp cut in the target price, TD Cowen still maintains a "Buy" rating for MicroStrategy. Analysts admitted that while the new target price of $260, compared to Monday's closing price of $92.68, still implies over 200% upside, this may sound "somewhat counterintuitive," but based on a model that maintains a 3x profit multiple and unchanged Bitcoin holdings estimates, the valuation is a reasonable inference.

Praises the "Digital Credit Capital Framework," Strengthening the Defensive Moat

In contrast to the target price reduction, TD Cowen gave a highly positive assessment of MicroStrategy's newly announced "Digital Credit Capital Framework" on Monday, describing the move as "incrementally constructive."

Analysts believe the announcement essentially formalizes the company's existing financial flexibility, shifting from one-way issuance financing to proactively optimizing the capital structure. The four core highlights of the framework are as follows:

| Capital Framework Policy | | --- | Specific Details and TD Cowen Evaluation | | --- | --- | | Rebuilding Dollar Reserves | Through the issuance of over 12 million common shares last week (funds not used to buy Bitcoin), dollar reserves have been fully rebuilt to $2.55 billion. This is sufficient to cover over 17 months of preferred dividend and interest expenses, helping the company withstand a prolonged Bitcoin downturn. | | Increase in Preferred Dividend Rate | The STRC preferred dividend rate was raised from 11.5% to 12%. This aims to stabilize the trading price at the $100 par value (which recently fell 26% below par due to the sharp drop in Bitcoin). TD Cowen views this as "modestly positive." | | Two-Way Capital Allocation and Buybacks | Authorized up to $1 billion in preferred share repurchases and $1 billion in common stock repurchases. This allows the company to exploit price dislocations in the capital stack for arbitrage. | | Bitcoin Monetization Plan | Formally established a cap of up to $1.25 billion for Bitcoin liquidation, with proceeds dedicated to replenishing dollar reserves. Analysts emphasize this is not a strategic shift but a codification of existing liquidity mechanisms. |

In summary, TD Cowen believes that amid the current harsh crypto winter, MicroStrategy's new framework effectively enhances credit transparency and capital flexibility, providing market investors with a sense of reassurance. As long as the company weathers this period of liquidity tightening, its value as a "Bitcoin leverage exposure tool" in traditional financial markets remains solid.