Investing Club Mailbag: What are price targets and how do I use them?

Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., November 11, 2022. 

Andrew Kelly | Reuters

I’m a (very happy) Investing Club member and would love to see a discussion of analysts’ price targets. Here are my three most pressing questions:

  • How are PTs arrived at? And why do they vary, sometimes widely, from analyst to analyst?
  • Do the analysts actually expect the stock to reach those targets?
  • Most important, as investors, how should we understand and utilize PTs as we manage our own portfolios and make buy/sell/hold decisions? 

Thanks so much. — Robbi

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Investing Club Mailbag: What are price targets and how do I use them?

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