Citi has reduced its price target for Strategy Inc. from $260 to $136. However, the bank maintained its Buy rating and High Risk designation.
The adjustment followed a major revision to Citi’s 12-month Bitcoin forecast. The bank lowered its Bitcoin price projection by 27% to approximately $81,800.
Bitcoin Growth and mNAV Expansion Remain Key
Citi analyst Peter Christiansen said the new Strategy price target still assumes some support from Bitcoin.
The valuation includes an estimated 40% upside contribution from a higher Bitcoin price during the next 12 months. It also assumes a 16% upside contribution from an expansion in Strategy’s market-based net asset value, or mNAV.
However, Citi significantly reduced its adjusted Bitcoin Yield estimates.
For fiscal 2026, the forecast fell from 10.4% to 2.6%. Meanwhile, the fiscal 2027 estimate dropped from 10.5% to 3.9%.
Strategy’s Capital Plan Extends Its Financial Runway
Christiansen said Strategy’s revised capital plan “buys more time for stabilization.”
Last week, the company issued approximately $1.15 billion in shares. As a result, its US dollar reserve increased from $1.4 billion to $2.55 billion.
According to Citi, the reserve is now large enough to cover around 17.4 months of preferred dividend payments.
Strategy’s capital plan also authorizes the company to increase its dollar reserve by another $1.25 billion. In addition, it can repurchase up to $1 billion of MSTR common stock and $1 billion of preferred shares.
Citi Reviews Strategy’s Preferred Shares
Citi noted that Strategy’s STRK and STRD preferred shares currently trade at discounts of approximately 45% to their par value.
However, the bank expects Strategy to place greater emphasis on STRC. This preferred security trades at a smaller discount of around 15% and has a relative size of approximately $10.5 billion.
Strategy Is Not the Main Source of Bitcoin Pressure
Christiansen also argued that Strategy should not be viewed as the central force behind the broader Bitcoin market narrative.
According to Citi’s estimates, Strategy’s trading activity represented only 0.79% of trusted Bitcoin spot trading volume during the past 12 months.
The company’s Bitcoin holdings are also expected to decline only slightly as a percentage of the total supply. Citi forecasts Strategy’s share falling from 4.0% to 3.8% of Bitcoin’s maximum 21 million-token supply by the end of the year.
