TD Cowen Strategy price target 2026 was cut to $440 from $500 as analysts see lower bitcoin yield due to dilution from new equity and preferred stock. They still view Strategy as a way to gain bitcoin exposure, and model a rebound in 2027 if prices rise. Here is what changed and why it matters. Strategy, the bitcoin treasury company formerly known as MicroStrategy, just got a lower one-year target from TD Cowen. The investment bank trimmed its fair value target to $440. The main reason is lower expected bitcoin yield per share as the company issues more stock to fund buys. The call does not change the long-term view, though. TD Cowen still sees upside if bitcoin prices move higher into 2027.

What the TD Cowen Strategy price target 2026 cut signals

TD Cowen believes Strategy will keep buying bitcoin at a fast pace in fiscal 2026, but with more dilution than they expected before. The bank now models the company adding about 155,000 BTC in 2026, up from a prior estimate of 90,000 BTC. That higher buying pace should grow total holdings. But the key drag is how Strategy funds the purchases. More common stock and more preferred stock mean a larger share count. When the company issues equity near parity to its net bitcoin per share, each new purchase adds less “bitcoin yield” for holders. That yield is the percent change in bitcoin held per fully diluted share. TD Cowen now models a 7.1% BTC yield for 2026. That is lower than its earlier 8.8% estimate and far below the 22.8% figure reported for 2025.

Key numbers at a glance

Price target: $440 (down from $500), using the same 5x multiple

BTC acquired in FY2026: ~155,000 (prior: 90,000)

BTC yield FY2026E: 7.1% (prior: 8.8%; FY2025A: 22.8%)

BTC $ Gain FY2026E: ~$6.3 billion (prior: ~$9.4 billion)

BTC yield FY2027E: 8.1% (prior: 6.6%)

BTC $ Gain FY2027E: >$13.5 billion (prior: ~$10.15 billion)

How bitcoin yield and dilution fit together

Bitcoin yield for Strategy is not a cash yield. It is the growth rate of bitcoin held on a per-share basis. If Strategy issues many new shares to buy more BTC, each share owns a smaller slice of the pile. That lowers bitcoin yield even if total holdings rise fast. TD Cowen also tracks “BTC $ Gain.” This is the dollar value of BTC that Strategy can add without raising its fully diluted share count. The bank multiplies that BTC Gain by the average bitcoin price in the period. Because the bank expects more equity issuance in 2026, it cut its BTC $ Gain view for that year to roughly $6.3 billion. The lower BTC $ Gain is a direct hit to fair value in the model, which explains the drop in the target.

Funding mix: equity and preferred issuance sets the pace

Strategy leaned into the recent bitcoin pullback instead of slowing its treasury program. Over the week that ended Jan. 11, the company raised about $1.25 billion by selling roughly 6.8 million common shares and about 1.2 million variable-rate STRC preferred shares. It used almost all of that cash to buy 13,627 BTC. TD Cowen notes the equity was sold near parity to Strategy’s underlying bitcoin per share. That choice helped the company add a large block of BTC quickly. But it produced little bitcoin yield for existing shareholders. This tactic makes sense if management expects bitcoin to rebound soon. If prices recover, future raises could happen at a premium, and new purchases would be more accretive on a per-share basis.

Why 2026 looks like a “build then benefit” year

TD Cowen’s read is simple:

2026 is a heavy build year with equity-fueled buying and lower per-share accretion.

2027 could bring a better mix as higher BTC prices improve accretion and raise BTC $ Gain.

The bank now forecasts BTC yield to re-accelerate in 2027 to 8.1%, and BTC $ Gain to climb to above $13.5 billion. That lift helps offset the near-term dilution and supports a more constructive stance beyond 2026.

Market backdrop: price path and index risk

A rebound in bitcoin prices underpins TD Cowen’s case. The bank models BTC at about $177,000 by December 2026 and roughly $226,000 by December 2027. Rising prices would increase the value of Strategy’s stack and make each new equity raise more accretive. That dynamic is why TD Cowen keeps a positive view on the stock even with the near-term cut. There is also an index inclusion angle. MSCI recently indicated it will not exclude bitcoin treasury companies like Strategy from its indexes, at least for now. TD Cowen calls this a positive near-term signal, since index status can support trading liquidity and demand. But the bank also flags a risk. Some large asset managers profit from spot bitcoin ETPs. If they view public bitcoin treasury companies as rivals, they could pressure index providers to exclude such names down the road. That would be a headwind.

Capital structure opportunities

TD Cowen highlights opportunities across Strategy’s preferred shares. The bank sees potential for income and capital gains across all five preferred tranches. It points to senior STRF preferred shares as one example, citing a possible internal rate of return near 30% if yields compress and dividends stay fixed. That view reflects the bank’s belief that the macro setup and regulatory momentum could favor the asset class and the issuer’s balance sheet in 2027.

How to interpret the TD Cowen Strategy price target 2026 in context

Think of the call as a sequencing story. The drop to a $440 target is not a statement against the core strategy. It is a recognition that 2026 likely carries more dilution. Management chose to add BTC fast during a period of weak prices, even if that meant lower per-share growth. If bitcoin trends higher into 2027, the math flips from “dilute to build” to “build then benefit.” Here is the practical read-through:

The company is still scaling its BTC holdings at speed.

Near-term per-share growth slows because of equity sales near parity.

Higher BTC prices would make future raises more accretive in 2027.

Index inclusion remains a swing factor but is supportive for now.

What could change the outlook

Three variables could move results away from TD Cowen’s base case:

Bitcoin price path: A slower or faster climb than $177k by end-2026 would swing BTC $ Gain, accretion, and sentiment.

Funding costs and mix: Issuing equity or preferreds at wider discounts would hurt yield, while issuing at a premium would help.

Index and regulatory stance: A shift by MSCI or others could alter demand from passive investors, while positive policy steps could do the opposite.

Bottom line for investors

TD Cowen trimmed its target because 2026 now looks like an “earn your upside later” year. Strategy is using the dip to add coins, but it is leaning on equity and preferred issuance to do it. That choice cuts bitcoin yield per share in the short run. The bank still likes the setup into 2027, as it expects higher BTC prices to boost BTC $ Gain and restore stronger per-share growth. The thesis depends on price recovery, steady access to capital, and stable index status. In short, the TD Cowen Strategy price target 2026 reflects lower near-term accretion but a still constructive two-year path if bitcoin cooperates.

(Source: https://www.theblock.co/post/385687/td-cowen-cuts-strategy-price-target-to-440-cites-lower-bitcoin-yield-outlook)

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