On Wall Street, optimism is something of the norm. Even though historical data tells us that not every stock is going to increase in value over the long run, there’s a wide disparity among analysts between positive and negative ratings. Whereas 56% of all analyst ratings are the equivalent of “buy” on S&P 500 companies, according to Barron’s, just 6% of all ratings fell on the sell side of the equation for S&P 500 companies, as of February.
These ratings, while not always accurate, typically offer investors a baseline of how institutional investors and analysts view their company and/or America’s most-influential businesses.
But every so often, an issued price target by an analyst or financial pundit is so far above and beyond the current price of a security that it’ll stop investors in their tracks.