RE: Peel Hunt reiterate BUY7 Jan 2020 15:56
I share scepticism about specific broker targets simply because there are so many variables that can affect the sp that it is very difficult if not impossible to consistently be accurate, whether professional or pi. I think ConMan94 made a valid comment in that the target itself is not the important point but what the thinking is behind it. It can reveal what direction the company may be travelling during the target period.
The fact that the broker is paid by the company is of course a relevant point BUT the broker also has their own reputation to think about. That should moderate wilder targets and it is also relevant to consider the quality of the company and his likely it is to deliver on plans and promises. It is worth remembering that the brokers may well have access to information not available to the wider market so I always study SPAngel and ARC comments carefully for any hints.
However it would be incorrect to say that broker targets are never accurate. For a period of time during 2017 / 2018 our broker targets were regularly achieved in reasonable time, as can be seen from the data below.
SP Angel
Target raised from 11.00 p to 14.3p (+ 30%) on 30 November 2017, and achieved as closing price at the end of March 2018, some 4 months later.
Target raised from 14.00p to 18.28p (+ 30.6%) on 23 Jan 2018, and achieved as closing price in mid April 2018, nearly 3 months later.
Target raised to 24.94p (+ 36.4%) on 27 April 2018 and achieved as closing price on 30 July 2018, some 3 months later.
ARC
ARC set initial target of 14.00p on 01 March 2018, and achieved as closing price on 29 March 2018, just 1 month later.
ARC. Raised target from 14.00p to 19.80p (+ 41.4%) on 10 April, and achieved on 26 April 2018, just 2 weeks later.
Whilst I understand some if the cynicism directed iPad broker targets I would also suggest that anyone who entirely ignores these broker reports is missing out on a potentially useful source of information.
Hope that helps.