How accurate are stock price targets?
Price targets are rarely accurate, but they are accepted by the market as having some value, and they do exert an influence at times. They can help create some good trading opportunities but don't take them too seriously. They are just a function of hopes and dreams and will shift on a daily basis.
How do you determine the target price of a stock?
The formula to calculate the target price is: (Price / Estimated EPS) = Trailing PE where Price is the variable we are solving for.
What does buy with a target price mean?
A target price is an estimate of the future price of a stock. Target prices are based on earnings forecasts and assumed valuation multiples. Target prices can be used to evaluate stocks and may be even more useful than an equity analyst's rating.
When should I sell a stock?
It really depends on a number of factors, such as the kind of stock, your risk tolerance, investment objectives, amount of investment capital, etc. If the stock is a speculative one and plunging because of a permanent change in its outlook, then it might be advisable to sell it.