TD Cowen sees Strategy adding 6,700 BTC from new STRE raise, maintains $141,000 year-end bitcoin base-case scenario

Research and brokerage firm TD Cowen expects Strategy to add 6,720 bitcoins to its corporate treasury following the company's €620 million ($715 million) issuance of its first euro-denominated preferred stock, STRE.

In a note to clients on Tuesday, analysts Lance Vitanza and Jonnathan Navarrete said that Strategy's perpetual Stream preferred stock initial offering, priced at €80 per share last week, represents the firm's entry into euro-based bitcoin-backed credit markets and opens a new funding channel for its BTC treasury model.

After deployment of €608.8 million in net proceeds, TD Cowen projects that Strategy will use "substantially all" of the funds to acquire 6,720 BTC at an estimated average price of $104,500, in line with current levels, according to The Block's BTC price page. 

Adjusting for common-share issuance required to fund STRE dividends over the next decade, TD Cowen calculates a net gain of 4,235 BTC. Strategy's approach — issuing preferred securities to raise capital and purchasing bitcoin with the proceeds — remains a core driver of its bitcoin-per-share expansion, the analysts said, adding that STRE issuance should increase Strategy's year-to-date bitcoin yield to more than 27%, bringing it close to the company's stated 30% target for 2025.

In another Tuesday note, TD Cowen highlighted that Strategy has resumed issuance under its variable-rate Stretch preferred stock (STRC) at-the-market program, funding more than half of Strategy's latest $50 million bitcoin acquisition, announced on Monday. Last week's $26.2 million of STRC issuance exceeded the total raised across all other preferred classes combined. STRC shares are designed to trade at or near $100 par, with the dividend rate adjusted to maintain price stability and a current rate of 10.5%.

Strategy now holds a total of 641,692 BTC — worth around $67 billion.

Expanding its preferred-stock coverage, TD Cowen initiated buy ratings and price targets on both the new STRE euro-denominated shares and the STRC shares, while reiterating its buy ratings on Strategy's existing STRF, STRK, and STRD classes.

The analysts set a €119 ($138) target for the newly issued STRE shares, which have 5.2x coverage from its bitcoin holdings, and an unsurprising $100 par target for the STRC shares, with 5.5x coverage. The firm also reiterated its $140 target for the 8% STRK convertible preferreds, with 4.7x coverage, and $112 for the junior STRD preferreds, which have 4.3x bitcoin coverage. The senior STRF preferreds carry a $126 price target and a 10% dividend rate, supported by 7.2x bitcoin coverage — the strongest in the structure, according to the research and brokerage firm.

"The preferred securities offer compelling income and price appreciation potential, we believe, with less expected volatility than the common shares, underlying bitcoin, or spot bitcoin ETPs," the analysts said. 

Base, bull and bear case bitcoin scenarios

TD Cowen also reaffirmed its broader bitcoin outlook coming into year-end, maintaining a $141,277 base-case assumption by Dec. 31, while outlining a more extreme upside scenario of $160,000 and downside scenario of $60,000. Bitcoin previously set an all-time high of around $126,000 on Oct. 6.

The analysts' base-case model assumes approximately $4 billion of quarterly bitcoin acquisitions by Strategy, while the upside scenario assumes more than $4.5 billion, and the bear case argues acquisitions would be "suspended due to market conditions or idiosyncratic loss of access to capital markets."

TD Cowen maintained a $535 price target on Strategy's MSTR common stock — 124% to the upside from Monday's closing price of $238.88 — reflecting its estimate of the company’s intrinsic bitcoin value per share as of December 2027. TD Cowen forecasts that Strategy will hold about 815,000 BTC by that point.

TD Securities or its affiliates are market makers in Strategy's securities.

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