Investing.com – Canaccord lowered its price target on Strategy stock (NASDAQ:MSTR) to $130 from $163 while maintaining a Buy rating, the firm said Tuesday. The stock currently trades at $86.93, down 77% over the past year and hovering just above its 52-week low of $81.81.
The firm said bitcoin fundamentals remain intact despite recent market conditions. The value proposition of an increasingly scarce store of digital value is unchanged from a year ago, Canaccord said.
Supply and demand dynamics for bitcoin remain attractive and the proliferation of blockchain technologies provides a tailwind, the firm said. Bitcoin no longer faces an identity crisis between being a risk asset and a store of value simultaneously, Canaccord added.
The firm said Strategy’s bitcoin acquisition engine remains attractive assuming modest bitcoin appreciation per year. Recent performance has not met that threshold, Canaccord noted.
“We think there is nothing broken here, either in the company’s model or in bitcoin, which suggests a pendulum swing back makes sense sometime over the medium term,” the firm said. According to InvestingPro, the stock’s RSI indicates oversold territory, and the platform’s Fair Value analysis suggests MSTR is currently undervalued at present levels.
In other recent news, Strategy has taken significant steps to address liquidity concerns by announcing a Digital Credit Capital Framework. The company has increased its USD Reserve to approximately $2.55 billion, providing coverage for around 17.4 months of dividend and interest obligations. This move aligns with a new policy that requires maintaining at least 12 months of expected coverage. Additionally, Cantor Fitzgerald reiterated its Overweight rating and set a $212.00 price target for Strategy, emphasizing confidence in the company’s liquidity strategy.
Meanwhile, Strategy’s STRC preferred shares experienced a decline to approximately $83, although they have shown partial recovery. Despite this, Benchmark reaffirmed its Buy rating and maintained a $570.00 price target, highlighting the company’s ongoing bitcoin accumulation. The recent rise in bitcoin prices, reaching a two-week high, also contributed to an increase in Strategy’s stock by 7%. These developments reflect the company’s focus on managing its financial strategies amidst fluctuating market conditions.
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