- Bernstein analysts put a lofty $600 price tag in 12 months for MSTR.
- The stock trades for $321.
- Macro headwinds have been blowing, making some sceptical.
Even the staunchest crypto bulls are getting sceptical.
Bernstein analysts put a lofty $600 stock price target on Michael Saylor’s Strategy in the next 12 months. According to a March 25 note to investors, an 80% price rally is in store.
Jotting an 80% price rally to $600 would mean Strategy’s market capitalisation tops $157 billion, putting it within the 100 most valuable companies in the world.
Some firms it would leave behind include investment bank Charles Schwab, with a market capitalisation of $145 billion and Citigroup with one at about $137 billion.
While Strategy owns 506,137 Bitcoin worth $43 billion, acting as a de-facto floor to any stock market plunge, some aren’t convinced.
“The prevailing uncertainty continues to shape our cautious outlook,” James Butterfill, head of research at research firm CoinShares, told DL News.
“The economic landscape has shifted dramatically from the promise of tax cuts and deregulation in the US to a reality of austerity and trade tensions.”
He’s referring to a gloomy outlook on the US economy after US President Donald Trump took office on January 20.
Since then, Trump kicked off tariff war against major trading partners, later paired with fears of rising inflation and slower economic expectations. To boot, consumer confidence has plunged to a multi-year low.
Bitcoin trades for $86,500, more than 20% away from its $108,000 all-time high in mid January. Some audaciously said a bear market is inbound.
Meanwhile, tech stocks have also been walloped. The benchmark S&P 500 Index has plunged nearly 6% over the same period, while electric car giant Tesla plunged nearly 50%.
But Berntstein is bullish on Strategy and Saylor’s plans to transform the software firm into a “Bitcoin bank.”
The need for a rally
For those bullish predictions to come true, however, one thing needs to happen: Bitcoin’s price needs to rise.
Can it? The Trump trade, which propelled Bitcoin to $108,000 as he took office, has seemingly run out of fuel.
A US strategic crypto stockpile, sweeping executive orders, the appointment of pro-industry figures to key government positions, and the first-ever White House crypto summit have all failed to reignite a Bitcoin rally.
“The macro environment is shaking us around,” wrote James Check, former Glassnode analyst, in his newsletter Checkonchain on March 25.
Bitcoin exchange-traded funds are showing signs of this fatigue. Since early February, investors in ETFs have sold more than they bought in five of the last seven weeks, according to JPMorgan.
Not the only bull
Even so, Bernstein analysts aren’t alone in their bullishness.
The average price target is $540, according to MarketWatch.
In January, asset manager Cantor Fitzgerald’s analyst Brett Knoblauch boosted his price target for Strategy’s stock even higher than Bernstein, to $613 from $518.
“MSTR has developed a capital markets flywheel that allows it to accretively add Bitcoin on a per-share basis,” Knoblauch wrote in a note to investors.
On March 19, Leo Sun, analyst at financial services company Motley Fool, said “If Bitcoin’s price surges over the next two years, Strategy’s valuations will soar.”
However, for that to happen, the air needs to clear a bit across the economy.
But even the most diehard bulls are in disbelief.
Referring to hopes that the macro headwinds will let up, and asset classes like Bitcoin or Strategy will be cleared for another price rally, Butterfill said: “I don’t think they will.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
