Understanding Analyst's

Discussion in 'New Member Introductions' started by Fisherbri226, Feb 24, 2024.

  1. Fisherbri226

    Fisherbri226 New Member

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    Hey all,
    Thought I would join to get to understand things you just cannot get answers to in research. Here is my first question to the knowledgeable ones out there?
    How is it an analyst can upgrade a stock target from say $15 to $20 but then drop it from BUY to HOLD? Very confusing to me.
     
  2. StockJock-e

    StockJock-e Brew Master
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    The give you a target, but what time frame? 1 month? 1 year?

    Its possible the short term current valuation is a bit high, so waiting for a pull back, but long term targets still in place.
     
  3. anndrewkru

    anndrewkru New Member

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    Analysts use sophisticated models to value stocks, which may include factors such as earnings projections, market conditions, and industry trends. If new information leads the analyst to revise the company's future earnings upward, this could result in a higher price target. However, if the stock price has already appreciated significantly and is now closer to this new target, the potential for further gains might be limited, prompting a downgrade to HOLD.
     
  4. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Well what's the current price? And sometimes the prior recommendation was a long time ago.

    The "BUY $15" target may be 3 years old. Back then the price may have been $10. So everything makes sense. Come to today, and the current price may be $18. So "HOLD $20" target makes sense. The analyst still thinks the individual stock has upside, but compared to other stocks in the market/sector it is not worth it to start buying.
     

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