What is a price target?
An analyst’s estimate of where a stock will trade in about a year, based on their model of the company. Targets cluster around the current price and are revised after the stock moves, so treat them as opinion.
A price target is an analyst’s guess at what a stock should be worth roughly twelve months out. If a stock trades at $100 and an analyst sets a $130 target, they are saying their model of the company’s earnings, growth and a reasonable valuation multiple gets them to $130. Headlines phrase it as "analyst sees 30 percent upside."
They are worth a glance and no more. Targets are usually set within 10 to 30 percent of the current price, because a wildly different number is hard to defend. They are revised after the stock moves, not before: when a stock jumps 20 percent, targets get raised the next morning. The chasing is so consistent that a target tells you more about where the stock has been than where it is going.
The average of all analysts’ targets, the "consensus target," is a slightly better signal than any single one, and the spread between the highest and lowest target tells you how much disagreement there is about the company.
If you find a target useful, use the reasoning behind it rather than the number. An analyst explaining why they expect margins to expand is information; the resulting dollar figure is arithmetic on an assumption.
Informational only, not financial advice. Updated September 4, 2026.
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