The Fool School: Ratings and Targets
- Share via
If you follow public companies in the news, you’ll frequently run across stories such as this: “Wingtip Investments raises rating for Pearls for Swine Barnyard Jewelry Co. (ticker: OINK) from ‘hold’ to ‘accumulate’ and sets 12-month target price of $80.”
That seems like very valuable information, but it’s not. At Fool HQ, we don’t pay much attention to analysts’ ratings such as “buy” or “outperform.” Thinking about them can make one’s head hurt. After all, how do you accumulate something if you don’t buy it? (It also strikes us as shady that very few analysts ever issue “sell” ratings. Could it be that they don’t want to tick off companies that might employ their firm in the future?)
Remember that price targets are just based on estimates, which may well prove to be too aggressive or too conservative.
The Motley Fool radio show can be heard on KFI-AM (640) Saturdays from 9 a.m. to noon.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
