What does a company's stock's 'price target' mean exactly?
Answer:
I try not to base my buys and sells on some smuck analysts. If you do follow them just do the opposite to what they recommend.
It is what the analyst "thinks" it will go for at a certain time. Many investors like me have our own "strike" prices.
So Merck was selling at $42 a share, I bought it last month at $38 when the analysts thought it was going to go down (it lost 8% in one day, that's the day I bought) - well, Merck won a VIOXX lawsuit in federal court today, so the stock spiked up over $1.00 in a single day - my strike price was $42.14, it went to $42.15, I made 10% in one month (and I'll buy it back when the stock gets nailed because it loses another vioxx lawsuit).
Strike prices can fluctuate based on so many unknowns - analysts predicted more vioxx losses than happened, so their strike prices were off base.
Price at which a holder of a stock is hoping to sell the stock.
The 'target price' is the price any specific analyst predicts the stock will rise to. Note that some analysts, or systems, will revise upward a stock that is working the way the figured if things continue to get better; others don't do that.
Very often the target price is determined by using some basic ratio or formula, such as price-earnings or price-to-cash flow and applying that to an earnings forecast.
Good luck.
A stock's price target is a target that the analyst covering the stock believes the price will go based on their models.
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