TD Cowen trims Strategy target, starts Sharplink coverage
TD Cowen cut the Strategy price target to $350 and began coverage of Ethereum staker Sharplink with a buy rating and $16 target, noting staking revenue could cover Sharplink’s costs if ETH stays low.
TD Cowen on April 9 lowered its price target for Bitcoin buyer Strategy to $350 and initiated coverage of Ethereum staking firm Sharplink with a buy rating and a $16 price target. The coverage was led by analyst Lance Vitanza.
TD Cowen valued Sharplink at $16 per share. The stock traded around $6.42 in after-hours trading and has fallen roughly 62% over the past six months.
The firm highlighted Sharplink’s focus on growing its Ethereum holdings through staking, the process of validating Ethereum transactions that generates token rewards. TD Cowen noted Sharplink can achieve a higher staking yield than many ETFs because ETFs charge fees and face liquidity limits when staking at scale.
Sharplink reported staking revenue rose 50% quarter-over-quarter to $15.3 million and generated 14,500 ETH from staking, valued at about $9.4 million at the time of the report. TD Cowen wrote that those staking returns should be sufficient to fully cover the company’s operating costs even if Ether’s market price remains depressed.
Sharplink disclosed a full-year net loss of $734 million, which the company attributed to a decline in the value of its Ethereum holdings in the second half of the year.
Joe Lubin, Consensys CEO and Sharplink chairman, called the company “a bridge between traditional public markets and Ethereum.” Consensys is among Sharplink’s investors.
On the Bitcoin side, TD Cowen kept a buy rating for Strategy while trimming its price target. Strategy holds more than $55 billion in Bitcoin and has disclosed plans to raise capital to fund additional purchases. The company said it can issue up to $21 billion of additional common stock (MSTR), $21 billion of a variable-rate preferred share (STRC) and $2.1 billion of a convertible preferred share (STRK), together amounting to about $44 billion of equity capacity.
TD Cowen said the revised price target for Strategy reflects a lower multiple on the company’s projected dollar gain from its Bitcoin holdings and reduced expectations for future Bitcoin prices. Strategy’s share price edged up to roughly $129 on Thursday.
The analyst reports were published Thursday and set out the firms’ respective price targets, recent operating results and the firms’ capital plans.
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