Dow 30 Price Targets - Too Much Optimism?

Below we highlight the 30 stocks in the Dow Jones Industrial Average.  For each one, we include its price, year-to-date change, consensus analyst price target, and the current distance from that price target.

The average stock in the Dow has a price target that is 32.47% above its current price.  AIG's price target is the furthest above current levels at 92%, followed by BAC, C, GM, BA and MSFT.  JNJ, CVX, WMT and IBM have price targets that are the closest to current levels. 

As shown by the year-to-date changes for each Dow stock, the ones down the most have price targets the furthest above current levels and vice versa for the ones that have held up the best this year.  The fact that the price target closest to the actual stock price is still looking for an 11% gain (JNJ) highlights the bullish pervasiveness that stays on the street.  Clearly analysts haven't been able to keep up with falling stock prices.   

Click to enlarge:

Comments

[Mexx:]

Who ever listens to analysts for price guidance anyways -in volatile times like today, these guys are just happy they are hanging on to their jobs. Very few if any, are willing to stick their neck out to provide real thought leadership on the direction of the market/industry and real company specific earnings guidance.

2008 Jul 07 04:20 PM

[Brandon:]

Citibank and these other companies need to figure out how much the crap on their books is worth. That's It.

2008 Jul 08 02:08 AM

[Emerald:]

I guess it depends on your time line. "C" at a target of $23 over the next 12-15 months is out there, but not unbelievable. The largest gains are made by buying near the bottom. I agree that you should never listen to the sell-side analysts.

2008 Jul 08 10:49 AM

[SivBum:]

Only 3 of the 30 showed marginal gain YTD....and that was last week. Brutal year so far.

2008 Jul 08 11:12 AM

[Blair:]

My put is that the Dow average is going down to the 2002-03 bear market level, say 7500.

Which stocks are going to be the principal 'droppers' that will cause the above forecast to come true implies those stocks that have not been hit too hard so far.

If the above assumption is correct, the financial stocks will bottom out price wise in the recent levels.

2008 Jul 09 02:46 AM

[vaduz:]

blair is a clever comment - acting on it needs nerves

2008 Jul 09 05:34 AM

[Ames Tiedeman:]

It is hard to believe how beaten up some of these names have become. But I suspect earnings will be horrible for several quarters.

2008 Jul 13 10:56 PM