Price Target

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What is a 'Price Target'

A price target is 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.

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.

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