How do you come up with a target price?
My Method:
1) Set target date.
2) Estimate sales for target date
3) Estimate shares outstanding for target date.
4) Divide #2 by #3 to get Sales per Share (SpS).
5) Find the Price/Sales (P/S) range.
6) Multiply (SpS) by the P/S range.
7) The answer will be a target price range.
8) Compare the 52 Week High/Low with the target price range to come up with a final target price.
Answer:
Frankly, I do not normally set target prices as such, but if the stock goes up significantly and beyond the range that I think it should be trading at, I will sell it. Normally that is 25% above its average high PE ratio for the last 10 years.
If you already know how to do it. why ask the question??
TFT2P
The interesting thing about price targets is that there is no surefire way to calculate them. For example, two separate traders holding a stock that is trading at $60 may have drastically different opinions about where the stock will go. One trader may set his or her price target at $75, while the other will set it at $120. Price targets are a function of risk tolerance and the amount of time that one plans on holding the security.
In technical analysis, traders use tools such as previous support and resistance, Fibonacci extensions and moving averages to aid them in determining an appropriate price target.
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
Other Questions and Answers: