By Nate Wolf
You don't normally see a Wall Street firm slash its price target on a stock by 60% and keep a Buy rating intact. Then again, Strategy isn't a normal stock.
Canaccord Genuity reiterated a Buy rating on Strategy -- the world's largest corporate holder of Bitcoin -- in a research note Wednesday, but dropped its target to $185 from $474.
Strategy shares are in the doldrums, so the price reset was probably overdue. The stock was down 3.9% to $128.05 on Wednesday, putting it on track for its lowest close since Sept. 11, 2024, according to Dow Jones Market Data.
Bitcoin has plummeted to around $75,000 since reaching a record high above $126,000 in October. The price hit its lowest point in over a year on Tuesday. Strategy stock has fallen in kind, though its slump began even earlier. Shares are down 72% since last July.
So, why the Buy rating? That's all about Bitcoin, too.
Strategy and its executive chairman Michael Saylor pioneered the digital-asset treasury playbook, issuing a combination of equity and debt to buy up Bitcoin. Today the company owns 713,502 coins, worth about $53.6 billion.
Investors paid a premium sometimes worth more than twice the Bitcoin on Strategy's balance sheet for levered exposure to the token. But that multiple -- known as the market to net asset value, or mNAV -- is now around 1.06. And with Bitcoin dipping below Strategy's average purchase price of $76,052, some observers worry the company will have trouble meeting its debt and dividend obligations.
Cannacord is not among those skeptics: "MSTR shares remain a bit of lightning rod for media attention when BTC is weak. But the truth, in this analyst's opinion, is that the underlying business model here has been built thoughtfully to withstand even a harsh crypto winter," wrote the firm's Joseph Vani.
The company's holdings dwarf its $8 billion of convertible debt. And dividends on its preferred stock can be serviced by modest share sales, Vani argued.
Shareholders want Strategy stock to do more than just survive. To be worth buying at this point, it will need some help from Bitcoin itself. In Canaccord's view, the flagship cryptocurrency has been incorrectly treated as a risk asset rather than a store of value. As with most risk assets, weak momentum has spurred more selling, but that pullback could end soon.
"Bitcoin remains a compelling store of value, checking all key boxes (scarcity, verifiability, etc.)," Vani wrote. "Perhaps the modest silver lining here is that BTC as a risk asset may finally be close to being flushed, and we can get back to the long-term value proposition of being a compelling store of value."
Canaccord expects Bitcoin spot prices to rebound about 20% in 2026, though the timing on that prediction is difficult, Vani conceded. And don't expect Strategy to recapture its enormous mNAV premium any time soon. The firm thinks shares will get back to a relatively modest 1.25 multiple relative to the underlying Bitcoin assets.
Strategy will report fourth-quarter financial results on Thursday, though "what is more important than MSTR's quarterly print is the outlook for Bitcoin itself moving forward," Vani wrote.
Write to Nate Wolf at nate.wolf@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 04, 2026 11:25 ET (16:25 GMT)
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