What is a price target?

Price targets can pertain to all types of securities, from complex investment products to stocks and bonds. When setting a stock's price target, an analyst is trying to determine what the stock is worth and where the price will be in 12 or 18 months. Ultimately, price targets depend on the valuation of the company that's issuing the stock.

What is an analyst price target?

A analyst price target is an analyst's estimated future price for a particular investment security. To arrive at a target price for a stock, the analyst may consider many factors, which are typically based on the outlook and projected earnings for that company. What Is the Consensus Price Target?

What if a target price is higher than the current price?

For example, if an analyst sets a target price that is higher than the current price, an investor may infer that the analyst expects the stock price to rise in the future. If the price target is lower, the analyst expects the stock price to fall.

What does lowering a price target mean?

When an analyst raises their price target for a stock, they generally expect the stock price to rise. Conversely, lowering their price target may mean that the analyst expects the stock price to fall. Price targets are an organic factor in financial analysis; they can change over time as new information becomes available.