TD Cowen initiates coverage of flailing Nakamoto with “buy” rating while cutting Strategy’s price target
Nakamoto has failed to rise above $1 a share since it received a delisting warning notice from Nasdaq in December.
TD Cowen analysts initiated coverage of several digital asset treasury companies (DATs), saying these “add meaningful value to investors as well as their respective underlying digital asset ecosystems. We believe the sector is likely here to stay and could command increasing investor attention over time.”
Surprisingly, the analysts placed a “buy” rating on struggling bitcoin treasury firm Nakamoto and cut the price target to $350 from $440 for Strategy, the largest corporate bitcoin holder.
Nakamoto has failed to rise above $1 a share since it received a delisting warning notice from Nasdaq in December. In March, it sold 284 bitcoin for an average cost of $70,422, a 40% cut from the $118,171 average purchase cost.
Nakamoto is now seeking approval for a reverse stock split to be held on May 8, “by a ratio of not less than 1-for-20 and not more than 1-for-50,” per an SEC filing. This would boost its price ahead of the delisting deadline on June 8. Shares are down 38% year to date, though TD Cowen’s note has boosted the price on Friday.
TD Cowen analyst Lance Vitanza told Sherwood News, “In all my years on Wall Street, I’ve never seen a company delisted for trading less than $1. Every time I’ve seen, the companies have been given warnings upon warnings and have ultimately gotten the stock back up above $1, often (though not always) via a reverse split.”
Vitanza added, “That said, we do believe stocks trading below $1 warrant additional scrutiny. In the case of NAKA, we got comfortable that the company has the financial resources to survive a protracted bitcoin slump… and certainly they are well-positioned to participate in the eventual next up cycle, whenever that should come.”
There are growing issues in the DAT market, and some analysts fear a risk of contagion if bitcoin fails to significantly rally.
Nic Puckrin, cofounder of Coin Bureau, told Sherwood that despite bitcoin holding above $70,000, bitcoin treasuries are still in a precarious position, with many having bought bitcoin at an average price well above this level.
“We’ve already seen this pressure showing up in the market, with Nakamoto forced to sell a portion of its bitcoin at a significant loss. If bitcoin falls further from here, which remains likely, we could see more selling and further downward pressure on DATs’ stock prices. The environment remains risky for bitcoin DATs for the foreseeable future,” Puckrin said.
TD Cowen analysts said that Nakamoto’s price target of $1 “is based on estimated BTC $ Gain of $394 million for FY27E, a 2x multiple, and a Bitcoin price of ~$140k at Dec-26.”
It also expects Nakamoto to acquire “roughly” 5,000 bitcoin per year.
“Nakamoto is more than just a DAT; we see distinct synergy potential via operating businesses involved in media, Bitcoin advocacy, and external digital asset management,” Vitanza wrote in the note.
As for Strategy, the price target cut is based “on a 4x multiple (was 5x) of projected BTC $ Gain for FY26E and reflects a lower bitcoin price deck.”
The company, which holds 766,970 bitcoin, is expected to “reach 1 million BTC before year-end, specifically by the end of November 2026, leaving enough leftover proceeds for about one more year of buying,” according to Bitcoin Treasuries, thanks to its STRC, MSTR, and STRK shares.
TD Cowen also initiated coverage of DATs Strive Inc. and UK-based The Smarter Web Company, both with “buy” ratings, giving a $26 price target for Strive and a 1-pound price target for Smarter Web.
