Ignore Price Targets
Own businesses. Not opinions.
What This Means
I don’t pay much attention to analysts’ price targets because, at the end of the day, they’re just opinions.
The same stock can have one analyst saying it’s worth $150 and another saying it’s worth $220. A few months later, those same analysts may change their targets again based on the latest news or price movement.
That’s why I don’t find them very useful.
Too often, analysts are reacting to what’s already happened instead of telling you something you don’t already know. By the time a stock gets upgraded after a big move higher or downgraded after a big decline, the market has often already priced in that information.
That’s why we do our own research on every investment we buy. We trust our own process—not someone else’s price target.
I’d rather spend my time understanding the business itself. Are revenues growing? Are earnings improving? Is management executing on its strategy? Has anything changed about why I own the company?
Those are the questions that matter.
Price targets will continue to change. The fundamentals of a great business are what ultimately drive long-term returns.
Common Questions
Should I ignore analysts completely?
No. Analysts can provide useful information about an industry or company. I just don’t think their price targets should determine whether you buy or sell an investment. Do your own research and make your own decisions.
Why doesn’t PureVest rely on analysts’ recommendations?
We believe in doing our own research. Every investment we buy has to make sense based on our own analysis—not because someone else raised a price target or issued an upgrade.
How often do analysts change their targets?
There isn’t a set timeframe. Analysts are constantly updating their price targets based on earnings reports, economic data, company news, and changes in the market.
That’s one of the reasons I don’t put much weight on them. If the target is constantly changing, it shouldn’t be the foundation of your investment decisions.
Remember This:
Trust your own process- not someone else’s prediction.