Target Price (Stock Market)
In the Stock Market, target prices are created by stock market analysts and the term itself can refer to a number of things. It can refer to the highest price that an analyst thinks a stock will reach in a given year. It can also refer to the price at which an analyst believes it will have reached its highest value potential. Usually this rating translates to the price at which the analyst would be willing to sell the stock. In most cases, analysts who cover a given stock for which they have created a target price will include a time frame; typically one year from the time of the report.
To produce a target price an analyst will take into consideration earnings, earnings potential, historical trends in industry and sub-industry groups, as well as various valuation metrics such as P/E ratio.
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