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A price target is an analyst's projection of a security's future price. 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.

Analysts generally publish their price targets in research reports on specific companies, along with their buy, sell, and hold recommendations for the company's stock. Stock price targets are often quoted in the financial news media.

Key Takeaways

1. A price target is an analyst's projection of a security's future price, one at which an analyst believes a stock is fairly valued.

2. Analysts consider numerous fundamental and technical factors to arrive at a price target.

3. Analysts generally publish their price targets along with their buy, sell, and hold recommendations for a stock.

4. Price targets for the same security can be different because of the various valuation methods used by analysts, traders, and institutions.

Understanding Price Targets

A price target is a price at which an analyst believes a stock to be fairly valued relative to its projected and historical earnings. 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.