Target Price

Target price means an analyst’s estimate of where a stock price may trade in the future. In simple terms, a target price is an expected future stock price. Target prices are important because investors use them to understand analyst views on valuation, upside potential, and downside risk. They are often based on earnings estimates, valuation multiples, or discounted cash flow models. For example, if an analyst sets a target price of $150 for a stock currently trading at $120, the analyst sees potential upside. A target price is not a promise. It is an estimate and can change when earnings, guidance, interest rates, or market conditions change.