Why Do Price Targets Matter?

Investors see price targets come and go every day, but why do they matter? Investment groups set price targets for stocks or other assets they hold, and they often set those predictions to share their expertise with the public. However, a price target is nothing more than an estimate. Yes, these investment firms want to be correct when they set price targets—as they need to make money—but they can never be sure. When you see a price target change, ask yourself why. Some price target changes indicate volatility with a firm or an asset. At other times, they indicate rapid growth or the opportunity to buy low and sell high. Be careful when reviewing price targets as they are not automatic signals to buy or sell and come back to Benzinga Pro often for more information on investing and building a portfolio.