Signal price

Investments in retail opportunities hit analysts’ target price

IIn recent trades, shares of Retail Opportunity Investments Corp (ticker: ROIC) exceeded analysts’ 12-month average target price of $19.64, changing hands at $19.77/share. When a stock reaches the target that an analyst has set, the latter logically has two ways of reacting: downgrade on the valuation, or readjust his target price to a higher level. The reaction of analysts may also depend on fundamental business developments that may be responsible for the stock price rally – if things are looking up for the company, it may be time for that target price to be raised.

There are 7 different analyst targets in Zacks’ coverage universe that contribute to this average for Retail Opportunity Investments Corp, but the average is just that – a mathematical average. Some analysts have below average targets, including one looking for a price of $17.00. And then, on the other side of the spectrum, an analyst has a target as high as $21.50. The standard deviation is $1.599.

But the whole reason to watch the Medium The goal of ROIC awards in the first place is to tap into a “wisdom of the crowds” effort, bringing together the contributions of all of the individual minds that have contributed to the ultimate number, as opposed to what a single particular expert thinks. So, with the ROIC breaking above that average target price of $19.64/share, ROIC investors have been given a good signal to spend another time evaluating the business and deciding for themselves: Is $19.64 just one stop on the way to a par higher target, or has the valuation been stretched to the point that it’s time to think about removing some chips from the table? Below is a chart showing the current thinking of analysts who cover Retail Opportunity Investments Corp:

Recent Breakdown of Analyst ROIC Ratings
» Running 1 month ago 2 months ago 3 months ago
Strong buy odds: 2 2 2 2
Purchase notice: 1 1 1 1
Hold Notes: 3 3 3 3
Sale Ratings: 0 0 0 0
Strong selling odds: 0 0 0 0
Average grade: 2.17 2.17 2.17 2.17

The average rating shown in the last row of the table above ranges from 1 to 5, where 1 is strong buying and 5 is strong selling. This article used data provided by Zacks Investment Research via Quandl.com. Get the latest Zacks Research Report on ROIC – FREE.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.