Hi Gents. My perception for what it is worth is that we seem to be playing a relatively new (price) game where no-one has really explained or is using the changes to the rules. My thought is that the target price is calculated as a totally theoretical version of a valuation based on discounted future earnings - as if the business was about to create revenue as of now. It assumes a nice polite and orderly market that has no manipulation of any sort. While not suggesting the market was ever not subject to some form of manipulation, today's technology allows manipulators far more scope to attempt to influence the price of a stock - especially penny dreadfuls. I am not so sure the ASX200 could be manipulated in quite the same way and certainly not over an extended period of time. Not a complaint or accusation by the way - just the way it is or at least appears to be. All I can take from these target prices is that if everything was on an even playing field the fact that the target price is a multiple of the existing trading price then it has room to increase (call it a confidence factor). It is no more than another indicator as to how that stock is sitting compared with like stocks - if that is you trust the source and independence of the information provider. Basically it is the same reason I have difficulty placing too much trust in charting these minnow stocks - just too many variables that can influence an outcome - but good luck to those who use charts to drive their strategic thinking. At the end of the day the market is driven by confidence and the FOMO factor - both of getting into and out at the right time. Totally agree (not withstanding external forces - world economics etc) it will be tangible outcomes (good or bad) that will determine the real price going forward the rest is simply conjecture. Probably why I would make a lousy trader !
IMM Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
(20min delay)