Target price is a calculated price that should represent the market value of the stock and also can be called target value. Target price normally is calculated by analysts of investment banks of brokerage companies using relative valuation and DCF valuation methods.
Target price should show the predicted price for the valued stock that could be expected after one year period. Of course, occasions when target price becomes true are quite rear, but usually target price is used for the purpose, that investors could see whether the stocks are undervalued stocks or overvalued.
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