TD Cowen lowered its split-adjusted price target on David Bailey’s Nakamoto Inc. to $17, a 58% cut, after resetting its bitcoin forecast. The bank kept its Buy rating, and the new target still implies nearly 275% upside from where NAKA trades now.
TD Cowen lowered its split-adjusted price target for Nakamoto Inc. to $17, citing pressure from bitcoin’s decline on the Nasdaq-listed company’s debt-heavy capital structure. Analysts Lance Vitanza and Jonnathan Navarrete still maintained their Buy rating on the David Bailey-led bitcoin treasury company.
Nakamoto ran a 1-for-40 reverse split in May, which made TD’s previous $1 target equivalent to $40 on the current basis. Today’s $17 price target represents a 58% cut to that outlook.
TD Cowen’s base case assumes bitcoin returns to $100,000
The revised base case assumed bitcoin can climb back to $100,000 by the end of 2026. That level sits roughly 25% off the $126,000 all-time high bitcoin recorded last October, and the firm also expects Nakamoto to suspend additional bitcoin purchases until 2027.
Vitanza and Navarrete wrote in a Monday research note: “We continue to view bitcoin holdings as the primary driver of value”. They said Nakamoto’s debt and preferred securities make its common shares more sensitive to changes in bitcoin’s price. The analysts valued its projected year-end bitcoin holdings at about $521 million, though those obligations reduce the value left for common shareholders.
Nakamoto repaid debt and holds 4,467 BTC
TD also views the company’s recent balance sheet moves favorably. Nakamoto repaid approximately $45 million of debt, extended $105 million of principal through June 2027, lowered its borrowing costs and authorized a share repurchase program of up to $25 million.
The firm also pointed to Nakamoto completing the closure of its legacy healthcare clinics last month, with the company now focused on bitcoin media, asset management and advisory services. It currently holds 4,467 BTC worth around $290 million, making it the 22nd-largest publicly traded bitcoin holder, according to Bitcoin Treasuries.
NAKA has fallen over 71% this year
Meanwhile, NAKA was trading at $4.65 on Monday, down more than 4.5% on the day. It has fallen over 71% this year, compared with bitcoin’s roughly 26% decline over the same period.
Source: The Block
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