Stock forecasts and analyst ratings are contradictory. Why?

Discussion in 'Ask any question!' started by bslow1, Mar 1, 2021.

  1. bslow1

    bslow1 New Member

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    Thanks for the help. I'm trying to read up on various stocks, and educate myself a little bit. When reading the analysis for a particular stock on a finance site, they will heap praise on the stock, they will say "16 analysts rate it a Buy, and 5 rate it a Hold". And then, it will show that the median target price is like 30% below the current stock price.

    How does this make sense? If a stock is rated a "Buy", why would they project a target price in which an investor would lose money? If I were to buy a stock, I would expect it to grow... I think that's the whole idea here. Are they saying that short-term, the stock will decline, but long-term its a Buy? But then what does "long term" mean? And why Buy now, when I could just wait for a better opportunity to buy?

    And on a separate, but equally confusing note, why am I seeing stocks crater after positive quarterly reports are announced? That seems counter-intuitive.

    I appreciate the explanations.
     

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