FormerXBC Inc XEBEQ

Yesterday or the day before..

[tamaracktop]

Very recently I quoted a report from Raymond James maintaining their target at $3.00.

The report I posted was published less than 2 months ago.

Raymond James has since discontinued covering Xebec.

I concluded my post by writing:

"2 months ago the consensus target was $2.99.

Analysts had to lower their targets because of the fall in the stock price.
When the stock gets back to $2.00, they'll all be quick to raise their targets to $3.00.

That's just how it works."

I've posted here many times that downward target revisions often result solely from moves in the stock price, rather than from fundamental changes at the company.

Analysts are often "reigned in" by their firms from maintaining targets any more than 100% or even 50% above the prevailing stock price in order to protect their firms from potential liability should they be wrong.

In a sense, analysts "go with the flow".

Here's a good example of that unwritten rule in action.

Read the opening paragraph in an article about Beacon's latest report on Greenlane:

"Beacon Securities analyst Ahmad Shaath is looking to renew his optimism on Greenlane Renewables (Greenlane Renewables Stock Quote, Charts, Analysts, News, Financials TSX:GRN). Though he maintained a “Buy” rating in an update to clients on Monday, it came with a lowering of the target price from $1.75/share to $1.30/share for a projected return of 76 per cent."

My point here is that when Xebec gets its legs back under it and turns higher again, analysts will raise their targets en masse.

Count on it.

Xebec had shareholder's equity of $289.77 million as of March 31st.

As of yesterday's close, the market is valuing the company at $150.08 million.

Just a couple of facts.

 

[tamaracktop]

This all underscores just how bold the Scotia analyst was initiating coverage with a $3.00 target. That's right, it wasn't a target revision, it was brand new coverage. This analyst was working with a blank slate. He wasn't just trying to save his "a**" because he had previously issued targets of $17 then $9 then $5 then $1.40 etc  etc., and he wasn't just

[tony08]

I completely agree with you on this TT.   Besides, in a humorous way, that's exactly what I was describing with my post of May 17, comparing analysts' evaluations with the old Hygrade sausage advertising... You have to laugh about it because otherwise with the way they play with the numbers, it's pathetic