Benchmark Keeps $570 Target on Strategy After Capital Plan

Benchmark Equity Research reiterated a Buy rating and a $570 price target on Strategy after the company launched a five-part capital framework. The target implies roughly 515% upside from Strategy’s Monday close of $92.68, when the shares rose 12.6%.

The framework sets a $2.55 billion reserve intended to cover dividends for about 17.4 months. It includes a $1 billion common share repurchase program and a $1 billion buyback plan for perpetual preferred shares across STRC, STRF, STRD and STRK. The board authorized sales of up to $1.25 billion of bitcoin from a treasury that Benchmark reports holds 847,363 BTC. The plan also establishes parameters to pause common share issuance if shares no longer trade at a premium to net asset value.

Analyst Mark Palmer wrote that the framework gives management formal authority to run the company’s capital program in reverse when market conditions require it. He described how the tools allow repurchasing common and perpetual preferred shares, monetizing bitcoin holdings to meet obligations, and suspending new common issuance when premiums to NAV disappear.

Benchmark noted each element of the framework maps to specific investor concerns. The firm highlighted explicit limits on capital use, a larger cash reserve for dividend coverage, and structured buybacks aimed at addressing dilution from prior issuance.

On the bitcoin authorization, Benchmark described $1.25 billion as small relative to Strategy’s reported treasury and called the amount a rounding error compared with the total BTC balance. Strategy sold 32 bitcoin in May under earlier authorizations.

The new capital framework was announced after the company’s common shares fell about 30% over the prior week and after STRC, the variable-rate Stretch preferred intended to trade near its $100 stated amount, dropped below $80.

Benchmark’s $570 target rests on the view that active two-way capital management-issuing securities when valuations are attractive and repurchasing them when buybacks are accretive-could support a much higher valuation. The firm presented the framework as a formal change from primarily issuing capital to operating a bidirectional capital strategy that can respond to market stress.