# Price target > An analyst's estimate of where a stock will trade at a future point, usually 12 months out, used with a rating to show expected upside or downside. Source: https://www.quantisnow.com/glossary/price-target Topic: Glossary / Analyst ratings Also known as: analyst price target, target price, 12-month price target Last updated: 2026-10-27 A price target is a [sell-side analyst's](https://www.quantisnow.com/glossary/sell-side-analyst) projection of the price a stock should reach over a set horizon, usually 12 months. It is published with the analyst's rating and is the most quoted number in any research note. ## How it works Analysts derive targets from valuation models: a multiple applied to forecast earnings (for example 22x next year's [EPS](https://www.quantisnow.com/glossary/earnings-per-share)), a discounted cash flow model, a sum-of-the-parts analysis, or, for pre-revenue biotechs, risk-adjusted sales of pipeline drugs. The target implies an expected return: Implied upside = (target - current price) / current price Targets are revised whenever the analyst's estimates or valuation assumptions change, most often after earnings, guidance updates or big price moves. A target change without a rating change ("raises PT to $60, keeps Buy") is far more common than an actual upgrade or downgrade. ## Why it matters for traders Targets frame how much conviction an analyst has, but they lag the market as often as they lead it. Traders look at: - **Size of the change.** A 30% raise signals a materially better outlook. A $1 trim is housekeeping. - **Consensus target.** The average across analysts, and how far the stock sits from it. - **Range.** A wide spread between highest and lowest targets reflects real disagreement. - **Chasing.** Targets raised right after a big rally often just follow the price. ## Example Northwind Therapeutics (NWTX) trades at $50. An analyst raises the target from $60 to $72 after strong trial data. Implied upside goes from 20% ($10 / $50) to 44% ($22 / $50). If NWTX rallies to $70 the next month, the target leaves only about 3% upside, which can prompt the analyst to either lift it again or downgrade on valuation. ## FAQ ### How accurate are analyst price targets? Not very, taken one by one. Stocks frequently miss or blow through targets. They are better read as a summary of the analyst's assumptions than as a forecast. ### What timeframe does a price target cover? Most firms use 12 months. Some use 6 or 18 months, and the note usually states the horizon. ## Related terms - [Analyst upgrade](https://www.quantisnow.com/glossary/analyst-upgrade.md): A sell-side analyst's move to a more favorable rating on a stock, such as from Hold to Buy, usually published with a new price target and thesis. - [Analyst downgrade](https://www.quantisnow.com/glossary/analyst-downgrade.md): A sell-side analyst's move to a less favorable rating on a stock, such as from Buy to Hold, usually published with a lower price target and rationale. - [Sell-side analyst](https://www.quantisnow.com/glossary/sell-side-analyst.md): A research analyst at a brokerage or investment bank who publishes ratings, price targets and earnings estimates on stocks for the firm's clients. - [Buy rating](https://www.quantisnow.com/glossary/buy-rating.md): An analyst recommendation that a stock is expected to outperform or deliver meaningful positive returns over the rating horizon, usually 12 months. - [Consensus estimate](https://www.quantisnow.com/glossary/consensus-estimate.md): The average or median of sell-side analysts' forecasts for a company's earnings, revenue or other metric for a given period. - [Price-to-earnings ratio (P/E)](https://www.quantisnow.com/glossary/pe-ratio.md): A valuation multiple equal to a stock's share price divided by its earnings per share, showing how much investors pay for each dollar of profit. ## On Quantisnow - [Live feed: Analyst Ratings](https://www.quantisnow.com/news/analyst-ratings) - [Analyst upgrades and downgrades](https://www.quantisnow.com/guides/analyst-upgrades-and-downgrades) - [Latest analyst upgrades](https://www.quantisnow.com/top/analyst-upgrades) - [Biggest analyst price target raises](https://www.quantisnow.com/top/price-target-raises) - [Biggest analyst price target cuts](https://www.quantisnow.com/top/price-target-cuts)