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KBW Starts Strategy Coverage With Outperform, Says Firm Offers Leveraged Bitcoin Exposure
The stock could be eligible for S&P 500 index inclusion once it adopts updated FASB accounting standards, the report said.
Feb 7, 2025, 1:46 p.m.
What to know:
- KBW initiated coverage of Strategy with an outperform rating and a $560 price target.
- The stock could be eligible for S&P 500 index inclusion once it adopts new fair value accounting methods, the report said.
- Strategy has a number of tools it can use to grow its bitcoin stack, KBW said.
Strategy (MSTR), the company formerly known as MicroStrategy, is an appealing investment for equity investors looking for levered bitcoin exposure, investment bank KBW said in a research report Thursday.
KBW assumed coverage of Strategy with an outperform rating and a $560 price target. The shares were 1% higher at around $329 in early trading.
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Once Strategy, the company co-founded by Michael Saylor, adopts the Financial Accounting Standards Board (FASB) updated accounting treatment for bitcoin holdings in the first quarter of this year, it will shift from an "outdated measurement approach to fair value accounting, with unrealized gains/losses flowing to net income," analyst Bill Papanastasiou wrote.
The company reported an impairment loss of $1 billion for the fourth quarter of 2024 because it did not adopt new FASB rules.
One of the most important criteria for joining the S&P 500 index is positive net earnings in the last quarter and the sum of the previous four quarters, the report said.
Strategy has the "largest bitcoin treasury held by a public operating company," , and the company has a number of tools it could use to expand its BTC stack, KBW said.
In the longer term, there is also the opportunity for Strategy to generate yield on-chain from applications built on the Bitcoin network, the bank said.
The development of applications on top of the Bitcoin network could result in a massive value unlock, as it is the most secure, decentralized and valuable public blockchain, the report added.
Read more: Strategy Sees Thursday Nasdaq Listing for STRK Convertible Preferred Stock
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Sizin için daha fazlası
Bitcoin’s Deep Correction Sets Stage for December Rebound, Says K33 Research
K33 Research says market fear is outweighing fundamentals as bitcoin nears key levels. December could offer an entry point for bold investors.
Bilinmesi gerekenler:
- K33 Research says bitcoin’s steep correction shows signs of bottoming, with December potentially marking a turning point.
- The firm has argued that the market is overreacting to long-term risks while ignoring near-term signals of strength, like low leverage and solid support levels.
- With likely policy shifts ahead and cautious positioning in futures, K33 sees more upside potential than risk of another major collapse.
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