Benchmark Stays Bullish on Strategy (MSTR) Stock With $570 Price Target

Research firm Benchmark has long been bullish on the Strategy stock, MSTR. In the latest projection, the platform has reaffirmed its bullish outlook, maintaining its Buy rating and a $570 price target.

It is worth noting that Benchmark’s current positive stance comes despite the recent market volatility and MSTR stock price fall. Analyst Mark Palmer believes that the Bitcoin treasury company’s new capital framework could be a positive catalyst, strengthening its long-term investment tactics and thus pushing the stock price up.

Benchmark analyst sees Strategy stock price at $570

According to the latest reports, Benchmark continues to hold an optimistic outlook on the Strategy stock, MSTR. Benchmark Equity Research recently reiterated its Buy rating for the Bitcoin treasury company, placing the MSTR stock price target at $570.

Interestingly, this new projection comes hot on the heels of Strategy’s latest introduction of a five-part capital framework. This structure gives the company greater flexibility to repurchase shares, sell BTC, and manage capital during market volatility.

Following the company’s announcement, the Strategy stock price saw a significant surge. The MSTR price closed on Monday at $92.68, marking a significant gain of about 12.6%. During the trading session, the shares rose by more than $10.

However, the Strategy stock price reversed these gains in the pre-market trading today. The shares fell by 2.5% to around $90.35. This sharp intraday price volatility underscores MSTR’s close connection to BTC. Most often, the Strategy stock price sees huge volatility based on the movements of the Bitcoin price.

Benchmark’s latest projection deserves much attention, especially considering this MSTR price volatility. Despite the recent slowdown, the analyst remains bullish and enthusiastic about the Strategy stock’s future.

How will Strategy’s new capital plan strengthen financial flexibility?

Recently, Strategy announced its new Digital Credit Capital Plan. It includes a $2.55 billion reserve to cover preferred share dividends for about 17 months. The plan also involves a $1 billion common stock buyback program and a $1 billion preferred shares repurchase program. The stocks covered are STRC, STRF, STRD, and STRK. In addition, the board has finalized the sale of up to $1.25 billion in Bitcoin from its treasury.

Commenting on this capital plan, Benchmark analyst Mark Palmer stated, “The upshot is that Strategy is now an active manager of both sides of its capital structure, an approach that we view as a significant positive for its shareholders.” For him, the plan helps the company to manage its financial strategy in accordance with the market conditions.

Instead of raising new capital, the company can buy back shares when they appear undervalued. As per the plan, Strategy could sell its Bitcoin holdings to address financial issues. It can also stop issuing new common shares under specific conditions. Palmer added,

This means that each part of Strategy’s new capital plan is designed to address the investors’ critical concerns. While the plan set clear guidelines on the ways in which the firm can use its capital, it also provides stronger support for preferred shareholders. According to Palmer, these measures could significantly gain investor confidence, thus influencing the Strategy stock price.