Financial Terms Glossary

Target Price

Formal

The prediction of a broker of the realistic or 'target' share price of a quoted company. If a share is $4 and the broker recommends a target of $5 then the broker is effectively recommending the stock as a 'buy'. Conversely, for a target price which is lower than the current price - the broker is recommending 'sell'.

Informal

How much is a share worth ? What someone is prepared to pay for it. However, share brokers (who make their living trading stocks and shares!) complete their own in-house calculations and estimate what the fair or 'target' price of a traded share should be. This is to encourage share-dealing activity and that is where they make their own margins.

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