Citi cuts Strategy target as Bitcoin forecast revised lower

Investing.com -- Citi cut its price target on Strategy Inc. to $136 from $260 in a note Wednesday, while maintaining its Buy rating and High Risk designation, after revising its 12-month Bitcoin forecast 27% lower to approximately $81,800.

Analyst Peter Christiansen said the new target assumes approximately 40% upside contribution from a higher Bitcoin price over the next 12 months and a 16% upside contribution from mNAV expansion from current levels.

Citi also meaningfully lowered its adjusted Bitcoin Yield estimates, with fiscal 2026 declining from 10.4% to 2.6% and fiscal 2027 falling from 10.5% to 3.9%.

On Strategy's updated capital plan, Christiansen said the move "buys more time for stabilization."

The company issued $1.15 billion worth of shares last week, lifting its USD Reserve from $1.4 billion to $2.55 billion, sufficient to cover 17.4 months of preferred dividends. The plan also includes authorization to increase the USD Reserve by $1.25 billion and repurchase $1 billion each of MSTR equity and preferred shares.

Citi noted that STRK and STRD preferred shares are trading at approximately 45% discounts to par, though the firm expects Strategy to focus more on STRC, currently at a 15% discount given its relative size of $10.5 billion.

On broader Bitcoin pressure, Christiansen said Strategy "shouldn't be the BTC narrative," estimating that its trading activity has amounted to just 0.79% of trusted spot volume over the past 12 months, and that its Bitcoin holdings will likely decline only modestly from 4.0% to 3.8% of the 21 million token supply by year-end.

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