S&P 500 Stocks Furthest Above and Below Consensus Price Targets

Even though we're currently in one of the worst bear markets in history, only 9 of the 431 stocks in the S&P 500 trading above $10/share have consensus analyst price targets that are below their current prices.  On the other hand, nearly 25% of the 431 stocks have price targets that are more than 50% above current prices.

Below we highlight S&P 500 stocks (>$10) that are currently the furthest below their price targets.  As shown, Massey Energy (MEE) has a price target that is 172% above its current price of $19.05.  AK Steel (AKS), Freeport-McMoRan (FCX) , and Consol Energy (CNX) rank 2nd, 3rd, and 4th behind MEE, and they're all Energy or Materials names.  Other notables on the list include Morgan Stanley (MS), Hartford Financial (HIG), U.S. Steel (X), and Halliburton (HAL).  Either analysts are extremely bullish on these names, or they haven't been able to lower price targets quick enough to keep up with falling stock prices.  Expect to see price targets lowered for these names in the coming months, but it's probably best not to pay attention to the news when it occurs since the analysts have been so wrong on the stocks already.

Below we list the nine stocks that are currently trading above their consensus analyst price targets.  Most of these stocks are above their price targets because they've performed well this year, which probably means analysts will need to raise their targets in the future.

Comments

[sr9web:]

Good article - thanks!

2008 Nov 07 05:53 PM

[gannfan:]

The consensus target on ABT is $61.57. ABT is trading BELOW its consensus target, not ABOVE.

Not that it matters since analysts are frequently wrong, but at least you should issue a correction and state the correct consensus target for ABT.

2008 Nov 07 08:31 PM

[knight722:]

How often do analysts review their targets? In periods of rapid price fluctuations it only takes a few laggards to make a "consensus" figure a false picture of current expectations. For those organizations that might follow a scheduled revisit to sectors on some regular basis, a published price target may sit out there for a while.

I agree that many price targets will be coming down but what would you expect in a declining economy?

2008 Nov 08 08:49 AM

[bbowen7:]

It has been apparent for a number of months that the top-down macroeconomic view differed radically from the bottom-up individual stock evaluations. It carries a reminder of the bond rating agencies - people in the game know that the ratings are not real, but the poor schmucks that look in from the outside and rely on things being what they purport to be get nailed. A few years ago there was a big deal about how the stock analysts needed to be separated from the brokerage firms to avoid touting; that was the least of the problem. Cynicism abounds - and rightly so.

2008 Nov 08 11:56 AM

[WPSPIKER:]

Good information to keep in mind, almost makes you wonder with some of the failures of the big companies maybe a lot of old info is still being tracked/added in?

Mark

2008 Nov 09 09:54 AM

[tipalia:]

agree totally with Rightinsanfrancisco we need to have stock analysts completely separated from the brokerage companies .Right now they cannot be trusted and that leaves the small investors on its own in this jungle of greed.

2008 Nov 09 10:38 AM