This week’s issue of Barron’s highlights the 2007 outlook for the stock market based on the observations of Wall Street strategists. Collectively, the group is looking for stocks to rise about 7.4%, which translates to 1,520 on the S&P 500 and 13,220 on the Dow.
We thought it would be interesting to compare the outlooks of Wall Street strategists with the analysts that cover the individual stocks. So using the average analyst price target of each of the Dow components, we calculated where the index would trade if each of those stocks reached its target. We also performed this calculation using only the price targets of the analysts with the best records on the stocks they cover.
According to the results of our calculations, it appears as though the individual analysts are more bullish than their strategist peers. Based on their price targets for individual stocks, analysts are looking for the Dow to rise 8.3% next year, while the analysts with the best record in the past are even more bullish, looking for gains of over 10%.
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