TD Cowen is optimistic that STRC funding will boost BTC yields and has raised its target price for Strategy.

Investment bank TD Cowen raised its price target for Strategy (MSTR) from $385 to $395 on Thursday, believing the market is underestimating the capital efficiency of the company's Bitcoin accumulation strategy following its increased issuance of STRC perpetual preferred shares. Analysts Lance Vitanza and Jonnathan Navarrete stated that the new price target represents over 110% upside from Strategy's closing price of $186.82 on Wednesday. The analysis points out that Strategy is gradually reducing common equity financing and relying more heavily on STRC perpetual preferred shares with a yield of 11.5% to fund its Bitcoin purchases. STRC is also a core component of Michael Saylor's "42/42 Plan," which aims to raise $42 billion over three years through equity and fixed-income instruments. TD Cowen believes the market underestimates the boost to "BTC Yield" from the STRC structure. This metric measures the growth efficiency of a company's Bitcoin holdings per share on a fully diluted basis. The report raised Strategy's fiscal year 2026 BTC yield forecast from 16.7% to 18.2%, and its 2027 forecast from 5.4% to 9.6%. Furthermore, analysts believe that market concerns about Strategy being a "perpetual dilution machine" are exaggerated. Currently, the company's annual preferred stock dividend payout of approximately $1.5 billion represents only about 2.2% of the value of its 818,334 BTC reserves. TD Cowen's base case scenario projects Bitcoin will reach $140,000 by the end of 2026; its optimistic scenario anticipates BTC rising to $175,000, with Strategy's quarterly Bitcoin purchases potentially exceeding $5 billion. (The Block)