Price Target

AAA

DEFINITION of 'Price Target'

1. A projected price level as stated by an investment analyst or advisor.

2. A price that, if achieved, would result in a trader recognizing the best possible outcome for his or her investment. This is the price at which the trader would like to exit his or her existing position so that he or she can realize the most reward.

VIDEO

Loading the player...

BREAKING DOWN 'Price Target'

1. An influential analyst on Wall Street may give a stock that is trading at $60 a one-year price target of $90.

2. 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.

RELATED TERMS
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth ...
  2. Risk Tolerance

    The degree of variability in investment returns that an individual ...
  3. Return

    The gain or loss of a security in a particular period. The return ...
  4. Resistance (Resistance Level)

    A chart point or range that caps an increase in the level of ...
  5. Analyst

    A financial professional who has expertise in evaluating investments ...
  6. Wall Street

    1. A street in lower Manhattan that is the original home of the ...
Related Articles
  1. Stock Analysis

    Best Stocks to Buy for Less Than $5

    Learn more about interesting small-cap stocks, selling for less than $5 per share, that investors may wish to consider adding to their portfolio.
  2. Fundamental Analysis

    Explaining Price Targets

    A price target is what an investment analyst projects a security’s future price to be.
  3. Economics

    Target Prices: The Key To Sound Investing

    Learn how to evaluate the legitimacy of target prices and why investors should trust these over ratings.
  4. Professionals

    5 Mental Mistakes That Affect Stock Analysts

    They know more about stocks than the average person, but analysts are still affected by biases. Find out what they are.
  5. Active Trading Fundamentals

    Support And Resistance Basics

    Understanding the concept of Support and Resistance in trading can drastically improve your short-term investing strategy.
  6. Trading Strategies

    The Daily Routine Of A Swing Trader

    From pre-market to after hours, see what you need to do to capture gains quickly.
  7. Forex Education

    Forex: How To Scalp Fundamentally

    Learn why event-driven scalping in the currency market involves balancing fundamentals with technicals.
  8. Investing Basics

    What's a Price-Taker?

    Price-taker is an economic term describing a market participant who has no effect on overall market activity.
  9. Investing Basics

    What are Class B Shares?

    Class B shares are one classification of common stock issued by corporations.
  10. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
RELATED FAQS
  1. Why do analysts sometimes give an overweight recommendation on a stock?

    Financial analysts give their opinions of the future performance of a security. They can give performance ratings of underweight, ... Read Full Answer >>
  2. How do I build a profitable strategy when spotting an Tri-Star pattern?

    Because the tri-star pattern is a relatively unreliable reversal signal on its own, a profitable trade strategy must include ... Read Full Answer >>
  3. I want to buy a stock at $30, sell when it reaches $35, don't want to hang on to ...

    Once you've identified a security that you want to purchase, you need to determine a price at which you want to sell if the ... Read Full Answer >>
  4. Where do I place my target when the price of a stock breaks out of a technical chart ...

    Technical chart patterns such as ascending triangles, head and shoulders and double bottoms have rapidly grown in popularity ... Read Full Answer >>
  5. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>
  6. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  2. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  3. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  4. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  5. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  6. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!