Benchmark Equity Research reiterated its Buy rating and $570 price target on Strategy, implying a 522% upside from the stock's $91.67 close, citing disciplined capital allocation and a growing cash reserve that strengthens the company's long-term bitcoin acquisition plan.
Benchmark Equity Research reiterated its $570 price target on Strategy, implying a 522% upside from the stock's $91.67 close.
"Strategy has demonstrated that its capital allocation framework allows management to deploy funds across bitcoin acquisitions, reserve building and securities repurchases without departing from its long-term treasury strategy," Mark Palmer, analyst at Benchmark, said.
The firm's Buy rating comes as Strategy extended its bitcoin buying pause to five weeks while increasing its cash reserve to $3.75 billion. The company sold 5.4 million MSTR shares for $544.5 million during the week ended July 26 and repurchased $25 million of STRC preferred shares. Strategy holds 843,775 BTC acquired at an average price of $75,476 per coin, representing about 4% of bitcoin's maximum supply.
The $3.75 billion reserve provides roughly 2.1 years of preferred dividend coverage, reducing the likelihood that Strategy would need to sell bitcoin to meet obligations. President and CEO Phong Le told Bloomberg Television this month that the company remains committed to accumulating bitcoin over the long term despite the recent emphasis on liquidity.
The rating follows Strategy's SEC filing showing no bitcoin purchases for a fifth consecutive week. The company last acquired 520 BTC on June 22, marking its longest pause since adopting its bitcoin treasury strategy.
Benchmark's Palmer said the larger reserve gives Strategy flexibility to fund preferred dividend obligations while preserving its ability to resume bitcoin purchases when market conditions become more attractive. The company's Digital Credit Capital Framework allows management to allocate capital across multiple parts of its capital structure, as shown by the $25 million STRC repurchase.
Strategy shares closed at $91.67 on Friday, down 2.1%. Benchmark's $570 target is among the highest on Wall Street.
The reaffirmation signals that Benchmark views Strategy's liquidity-building phase as a strengthening measure rather than a retreat from bitcoin accumulation. Investors will watch weekly SEC filings for signs of resumed bitcoin purchases and the company's Q2 earnings report, expected after the market close on Thursday.
This article is for informational purposes only and does not constitute investment advice.
