TD Cowen Raises MicroStrategy Target to $395 on STRC Thesis

TD Cowen raised MicroStrategy’s price target to $395 from $385 on Thursday. Analysts Lance Vitanza and Jonnathan Navarrete flagged a shift toward heavier issuance of STRC perpetual preferred stock and calculated an implied upside of more than 110% from MicroStrategy’s $186.82 closing share price on Wednesday. The note disclosed that TD Securities has an investment banking relationship with MicroStrategy and managed or co‑managed a public offering for the company within the past 12 months.

STRC is MicroStrategy’s variable‑rate perpetual preferred stock, currently yielding about 11.5%. The instrument has more than $8.5 billion in face value outstanding and is being used to fund bitcoin purchases directly as part of CEO Michael Saylor’s three‑year 42/42 capital plan, which targets roughly $42 billion via equity and an equal amount via fixed‑income instruments.

TD Cowen’s analysis says the company’s heavier use of preferred issuance, rather than frequent common equity raises, can make bitcoin accumulation more capital‑efficient. The firm raised its forecast for MicroStrategy’s BTC Yield, a metric that measures the percentage change in bitcoin holdings per fully diluted share, to 18.2% for fiscal 2026 from 16.7% and to 9.6% for fiscal 2027 from 5.4%.

The analysts also increased their estimate of dollar gains in bitcoin holdings for 2026 to $13.9 billion from $12.7 billion. TD Cowen noted MicroStrategy’s breakeven market NAV multiple is about 1.22 times, not 1.0 times as some investors have assumed, meaning issuing common equity below that level would dilute existing shareholders.

TD Cowen described preferred issuance as a way to channel capital from yield‑seeking investors into the company’s bitcoin treasury with less dilution in many scenarios. The bank estimated MicroStrategy’s annual preferred dividend obligation at roughly $1.5 billion, equal to about 2.2% of the value of its 818,334‑coin bitcoin treasury. The analysts calculated that modest bitcoin appreciation would be sufficient to cover that dividend burden while allowing continued accumulation.

The note acknowledged a potential scenario in which part of the preferred dividend is financed through bitcoin sales, which MicroStrategy management has referenced, and concluded the company would remain a net accumulator provided STRC issuance continues at current pace. MicroStrategy reported raising more than $5.5 billion through STRC in the first quarter of 2026; TD Cowen noted the company raised over $2 billion in STRC during that quarter and more than $5 billion year to date.

In its base case, TD Cowen assumes bitcoin reaches about $140,000 by the end of 2026 with purchases near $4 billion per quarter. An upside case in the note pegs bitcoin around $175,000 by year‑end with quarterly acquisitions exceeding $5 billion. The firm acknowledged the implied upside from current share prices may appear large and said its valuation reflects leverage to bitcoin price movements and expected capital efficiency gains from STRC issuance.