How Seriously Should You Take Price Targets?

How Seriously Should You Take Price Targets?

Today on Industry Focus , we dip into the mailbag and tackle topics like analyst price targets, the best resources for new tech investors, and the hot-button issue of payment for order flow (PFOF) and how it affects incentives between brokers and market makers.

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This video was recorded on Oct. 8, 2021.

Dylan Lewis: It’s probably October 8th and we’re dividend mailbag. I’m your host, Dylan Lewis and I’m joined by’s Jason Hall. Jason, how’s it going?

Jason Hall: Happy Friday, my friend, I am ready to answer some questions from our viewers.

Dylan Lewis: Isn’t as the best. When people right in and they’re like, Hey, I’m interested in this because there are things that I think we are dying to talk about sometimes, but we don’t necessarily know that will be interesting to our listeners or to our members, and so for people to say, hey, I want to hear about this, especially some of the chunkier stuff that we’re going to get into on today’s show. I always think it’s such a treat. Be warned sometimes you can lead us down the rabbit hole [laughs] that’s the thing, but that’s half the fun. Managed. When I really go down there and I look up and my commitment staring at my phone for 30 minutes. It’s humbling technology as a way of creeping in. We’re going to be talking through three different topics on today’s show. We’re going be talking about price targets we are going to talk about payment for order flow, and we’re also going to be talking about ways to get started as a tech investor. All of these coming directly from our listeners, and I have to put a plug out there if you ever have something that you want us to be talking about on the show, Industry Focus, at at MF, Industry Focus on Twitter . We love getting those ideas. Jason. This first one comes from Heidi. Heidi asks, I’ve noticed that the Motley Fool does not talk much about price targets, but I’m hoping you can answer a question I have about them. Sometimes the analysts will give a price target that is much higher than the current price. But the stock is rated as a hold. On the other hand, sometimes a price target is the same or lower and they rated stock is a buy. Can you please help make sense of this for me? I think maybe we should just start with the price target definition, what it is, because I know it for the most part people are going to be following along and no, but I don’t want to leave anybody behind your Jason.

Jason Hall: Yes, it’s good idea.

Dylan Lewis: So I mean, when we’re talking about our price target, we’re generally talking about an analyst publishing an opinion on where a stock will be 12 months from now.

Jason Hall: These is sell-side analysts to, you read on Yahoo Finance or one of these other ticker feed sites, are you here on CNBC or something and they say, Wall Street analysts, price targets. They’re talking about sell-side analysts. Go ahead.

Dylan Lewis: This is published research that works its way into the financial media. Often this is going out to a client base or something like that, but works its way into articles, and then we have coverage on that’s working its way into this as well and talking about these topics, Jason.

Jason Hall: Great, and a lot of times we’re generally kind of hitting on what the analysts are saying to try to put a Foolish take on it. To give them more holistic whole picture of it.

Dylan Lewis: […]

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