Analyst price target.
In plain English
An analyst price target is a specific dollar figure a research analyst attaches to a stock, saying where they think it trades over their forecast window. It comes out of a valuation model, often earnings times a chosen multiple, so the target is only as good as the assumptions behind it. Firms publish targets alongside a rating such as buy, hold, or sell, and they revise both as news arrives. Analysts can face conflicts when their firm does other business with the company, which is why disclosures appear on research reports. A target is a forecast, not a commitment, and nothing forces the price to reach it.
01Why it matters
A price target can read like a promise when it is one person's model output, so reading the assumptions behind it tells you far more than the number itself does.
02The math, step by step
An analyst models $4.00 of earnings per share next year and decides the stock deserves 20 times earnings. 4 times 20 equals 80, so the price target is $80. Change the multiple to 15 and the same earnings produce a $60 target.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
It is not a promise. A price target is one analyst's output from one model, and different analysts covering the same company often publish targets far apart. Nothing obligates the stock to reach the number, and targets get revised constantly.
04Receipts
Every figure on this page is sourced to a primary document. Tap to open the original.
Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice