Strategy’s MSTR Stock Crash Leads Wall Street Analysts To Cut Price Target To $130

Wall Street brokerage Canaccord has lowered its price estimate on Michael Saylor’s Strategy (NASDAQ: MSTR). It slashed the MSTR stock target to $130 from $163 earlier this year as the stock continues to crash.

Wall Street Analysts Reduce MSTR Stock Target

The revision follows a long period of a downward trend in Strategy’s stock price. In the last trading session, the MSTR stock was selling for $86.93, up just slightly from a 52-week low of $81.81 and down 77% from a year ago. However, the MSTR stock gained 8.12% to $93.96 today after the company announced its Digital Asset Framework initiative.

Meanwhile, Canaccord’s long-term forecast on the Bitcoin hasn’t changed despite the sharp drop in the stock, it said. The brokerage said that the investment case for the cryptocurrency is still quite the same, referencing ongoing scarcity and the increased uptake of blockchain technology.

Over time, Bitcoin has increasingly revealed its function in the financial markets, says the firm. The digital asset is no longer “facing uncertainty” over its status as a speculative investment or a long-term store of value, it said.

Canaccord has further noted that Strategy’s corporate strategy around Bitcoin remains viable, as long as BTC provides a moderate annual appreciation. It noted however that recent market performance has been disappointing of that expectation.

“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 brokerage said.

Based on the Relative Strength Index (RSI), Strategy shares are currently in oversold territory. However, the platform’s Fair Value analysis indicates that MSTR might be trading at undervalued prices. Meanwhile, TD Cowen also reduced its Strategy stock target to $260.

About The Company’s Recent Digital Credit Initiative

The new slashed goal comes on the heels of a number of recent developments that have been affecting Strategy’s finances. The company recently launched Digital Credit Capital Framework with a view to boost liquidity management.

To support the drive, Strategy raised its U.S. dollar cash buffer to nearly $2.55 billion. It covers about 17.4 months of the company’s expected dividend and interest payments. The transfer is also in line with a new policy that stipulates liquidity of at least 12 months of expected commitments.

In separate comments, Cantor Fitzgerald reiterated its Overweight rating on Strategy and its $212 price target, based on its confidence in the company’s liquidity plan. Benchmark also reiterated its Buy rating and maintained its $570 price target unchanged while noting that although prices of its preferred shares have been on a downtrend recently, Strategy continues to accumulate its Bitcoin.