Bullish on Strategy accelerating coin accumulation and deleveraging! TD Cowen raises MSTR price target to $400

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Wall Street investment bank TD Cowen released a report on Tuesday stating that as MicroStrategy accelerates its Bitcoin purchases, coupled with recent large-scale convertible debt repurchases and an improved balance sheet, the company's overall financial position continues to strengthen. Consequently, the firm has slightly raised its price target for MSTR from $395 to $400 while maintaining a "Buy" rating. Analysts noted that MicroStrategy is not only "hoarding" coins at a pace exceeding market expectations, but its recent series of precise balance sheet optimization operations are positive for both shareholders and creditors. The TD Cowen report indicated that since the last earnings release, MicroStrategy's Bitcoin accumulation speed has significantly outperformed the original model's projections. Notably, in the second quarter, funding was primarily raised through preferred shares, totaling $1.95 billion to date, while common stock issuance remained relatively limited, successfully reducing dilution pressure. Almost all of these funds were directly used to purchase Bitcoin. As a result, before the end of the second quarter, the cumulative amount of Bitcoin purchased by MicroStrategy already exceeded TD Cowen's original estimate for the entire quarter. Analysts now expect MicroStrategy to add approximately 100,000 BTC in the second quarter and have simultaneously raised their full-year forecasts: - The 2026 "BTC Yield" estimate has been revised upward from 18.2% to 19.8%; - The 2026 "BTC $ Gain" estimate has been increased from $13.89 billion to $15.16 billion. As of May 17, the amount of Bitcoin per 1,000 "fully diluted shares" of MicroStrategy has grown from 1.95 times at the end of 2025 to 2.21 times. TD Cowen believes that even with continued financing and expansion, MicroStrategy's Bitcoin accumulation speed continues to outpace equity dilution, which is the best proof of the success of the company's financing model. Balance Sheet Cleanup In addition to continuous coin hoarding, another major reason for TD Cowen's price target hike is MicroStrategy's recent announcement to repurchase approximately $1.5 billion in zero-coupon convertible notes due in 2029. According to the announcement, MicroStrategy completed the repurchase for approximately $1.38 billion, effectively settling the debt early at about 92% of its face value. TD Cowen analyzed that this move not only effectively reduces fully diluted share exposure and improves the company's overall credit quality, but also alleviates future refinancing pressure, signaling to the market that the company possesses high financial flexibility. Controlling Over 4% of Global Bitcoin, Attractive Potential Upside As previously reported by BlockTempo, MicroStrategy spent approximately $2.01 billion to sweep up 24,869 BTC between May 11 and May 17. Currently, MicroStrategy holds a total of 843,738 BTC, accounting for 4% of the 21 million total Bitcoin supply. As for how the $400 price target was calculated, the TD Cowen team stated that they applied a 3x valuation multiple to the projected 2026 "BTC $ Gain" of $15.16 billion; then added the expected year-end total Bitcoin holding value of $132.9 billion; and finally subtracted $3.5 billion in debt and $15.5 billion in preferred stock obligations, ultimately arriving at a fair value per fully diluted share of approximately $400. Observing market performance, MicroStrategy (MSTR) closed at $166.63 on Monday. Compared to the high of $455.90 set over the past year, the stock has pulled back significantly by about 63%. Based on the $400 price target provided by TD Cowen, this implies a potential upside of over 140% from current levels.

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