What it is
A price target is a specific future price level that a financial analyst believes a stock will reach within a defined timeframe, usually 12 months. Analysts derive these targets from detailed financial models, including discounted cash flow (DCF) analysis, comparable company analysis, and precedent transactions. The price target reflects the analyst's assessment of the company's intrinsic value and potential for growth, often accompanying an analyst rating to justify the recommendation.
Price targets often move stock prices, especially when a new target is significantly above or below the current market price, or when multiple analysts adjust their targets in unison. Investors watch these targets to understand the potential upside or downside an analyst sees in a stock. While they provide a benchmark, price targets are projections that can change rapidly with new information, and actual stock performance may differ significantly from the target.
Why it matters
Price targets offer a professional estimate of a stock's potential value, helping you assess its upside or downside. They are a key component of analyst reports.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice