RE:RE:We have a potential of a $300 stock hereHi BBDB859,
I agree with you. These reports by the professions at RBC and others can be useful if you know how to use them.
In response to the general comments on this post on target prices I would say: the target prices are not a promise. By making a target 5 years out is an exercise used by professionals as an aid to decision making. It is one of the tools in their tool box.
I will give you an example. Warren Buffet when he buys into a company intends to hold that company forever. If you sell you pay taxes. Never sell – let it compound. So, he looks 30 years down the road. What will this company be like. How much will it be worth. Revenue, FCF, Earnings. Obviously, it is a judgement based on his experience. Not an exact process but helpful to decision making. Of course, many things can happen. During the Dot Com bubble loads of people were madly buying Dot Com stocks. Buffet asks himself will these companies be around 30 years from now? It was not clear to him which ones would still be around. So, instead he bought Benjamin Moore Paint. They were laughing at him saying this time it’s different. In the months that followed the Dot Com bubble burst. He still owns Benjamin Moore Paint.
Its ok to look down the road 5 or 6 years. An intelligent thing to do to aid decision making.
Good luck to all
Snowey