Key facts
- Citi raised its price target for MicroStrategy (MSTR) stock to $240 from $136.
- The new price target represents a 76% increase from the previous target.
- MicroStrategy purchased 1,665 Bitcoin for $142.7 million at an average price of $85,681.
- MicroStrategy now holds 847,666 Bitcoin.
- Citi increased its Bitcoin price target assumption to $113,000.
Citigroup has upgraded its price target for MicroStrategy (MSTR) stock to $240 from $136, a move that represents a 76% increase and signals a potential 64% rally from the stock's current price of around $159. The upgrade comes as Bitcoin has extended its recovery above $86,000.
Citi's new valuation is driven by two main factors: the expectation that Bitcoin will account for approximately 34% of MicroStrategy's upside over the next year, and a 16% increase linked to a higher market net asset value multiple for the company. The bank also raised its assumption for Bitcoin's Yield Multiple to 4.0x from 2.5x, increasing its estimated market net asset value (mNAV) to 1.24x from 1.065x. Citi noted that historical mNAVs have ranged from 1.25x to 1.50x when Bitcoin trades above $85,000 and approaches $90,000.
Despite a more conservative stance on MicroStrategy's cash reserve strategy and potential dilution, Citi analysts raised their Bitcoin price target to $113,000.
In parallel, MicroStrategy has continued to increase its Bitcoin holdings. Last week, the company acquired an additional 1,665 BTC for approximately $142.7 million, at an average price of $85,681 per Bitcoin. This acquisition brings MicroStrategy's total Bitcoin holdings to 847,666 BTC, acquired at an average price of $75,437 per BTC for a total cost of about $63.95 billion. This marks the second consecutive week of Bitcoin purchases after a brief pause earlier in the month, following a previous $75 million transaction for 950 BTC.
To finance these Bitcoin acquisitions, MicroStrategy, led by Michael Saylor, sold over 1.46 million shares valued at approximately $246.2 million. This financing strategy has become more prominent after the company's preferred stock fell below its $100 par value earlier this year.
Meanwhile, Bitcoin's price has surged, trading above $86,000 and reaching $86,803.94 at press time. This rally follows Citi's upgrade of its fiscal 2027 Adjusted Bitcoin Yield forecast to approximately 5.9%, an increase of nearly 190 basis points.