TD Cowen Raises Strategy Price Target to $400 as Bitcoin Buying Outpaces Forecast

TD Cowen raised its price target on Strategy, formerly known as MicroStrategy, to $400, citing faster-than-expected Bitcoin accumulation and an improving capital structure.

Crypto news outlet The Block reported on May 19 that TD Cowen increased its target from $395 to $400 and kept its buy rating.

The brokerage attributed the higher target to expanded fundraising through preferred stock issuance and additional Bitcoin purchases.

Strategy has raised about $1.95 billion so far in the second quarter, primarily through preferred shares, and has used most of the proceeds to buy Bitcoin.

TD Cowen said the company has already purchased more Bitcoin than it had forecast for the entire second quarter. Its current estimate for second-quarter Bitcoin purchases stands at about 100,000 BTC.

The firm raised its forecast for this year's BTC Yield to 19.8% from 18.2%. It also lifted its estimate for BTC Dollar Gain to $15.16 billion from $13.89 billion.

TD Cowen also gave a positive assessment of Strategy's repurchase of about $1.5 billion of convertible notes at roughly an 8% discount to par. The transaction reduces potential dilution and helps ease future refinancing risk, it said.

Strategy currently holds 843,738 BTC. That represents more than 4% of Bitcoin's maximum supply of 21 million tokens.

The company bought an additional 24,869 BTC in the week from May 11 to May 17, spending about $2.01 billion. That marked its second-largest weekly purchase this year.

TD Cowen said its $400 price target reflects an expected year-end value of $132.9 billion for Strategy's Bitcoin holdings, among other factors.

Strategy shares closed at $166.63 on May 19. TD Cowen's target implies about 140% upside from that level.