Citi Raises MSTR Price Target to $240 on Higher Bitcoin Forecast
Citi has raised its price target for Strategy (MSTR) to $240 from $136 while maintaining a Buy rating on the stock.
The higher target follows Citi’s decision to increase its 12-month Bitcoin forecast to approximately $113,400.
With MSTR closing around $160.50 on Oct. 1, Citi’s new $240 target implies approximately 49.5% upside.
Higher Bitcoin Forecast Boosts MSTR Outlook
Bitcoin is the biggest factor behind Citi’s higher Strategy valuation.
Citi raised its 12-month Bitcoin forecast by approximately 39%, from $82,000 to $113,400. The bank estimates that Bitcoin appreciation could contribute roughly 34% to MSTR’s potential upside.
Strategy’s large Bitcoin treasury makes its stock highly sensitive to changes in the price of BTC.
As Bitcoin rises, the value of Strategy’s holdings increases. The company also uses equity, preferred stock and debt to acquire additional Bitcoin, potentially increasing Bitcoin exposure for MSTR shareholders.
Citi’s more bullish Bitcoin forecast therefore increases the value the bank assigns to Strategy.
Citi Expects MSTR’s mNAV to Expand
Bitcoin isn’t the only reason Citi increased its MSTR price target.
The bank also expects Strategy’s mNAV premium to expand, which Citi estimates could contribute another 16% of potential upside.
mNAV measures Strategy’s market valuation relative to the net value of its Bitcoin holdings and other assets. When MSTR trades above 1.0x mNAV, investors are paying a premium to the underlying value of those assets.
Citi’s updated valuation assumes Strategy trades at approximately 1.24x mNAV.
The bank also increased its Bitcoin Yield Multiple from 2.5x to 4.0x. This places a higher value on Strategy’s ability to use the capital markets to increase Bitcoin exposure per share.
Combined, Citi estimates that Bitcoin appreciation and mNAV expansion could produce roughly the 50% upside necessary for MSTR to reach $240 from its Oct. 1 closing price.
What Could Stop MSTR From Reaching $240?
Citi’s new price target depends heavily on Bitcoin performing as expected.
If Bitcoin fails to reach Citi’s $113,400 forecast, the value of Strategy’s Bitcoin holdings would be lower than assumed in the model.
MSTR could also face pressure if its mNAV premium contracts rather than expanding toward Citi’s projected 1.24x multiple.
For now, Citi’s combination of a higher Bitcoin forecast and expectations for mNAV expansion has resulted in a significant increase in its Strategy price target—from $136 to $240.
