Broker RBC Capital Markets has more than doubled its Afterpay price target from $29 to $60 and described it as the second-most expensive stock on the ASX.
The valuation is based on a financial 2022 estimated forward enterprise value to sales multiple of 15 times.
You sometimes have to wonder at these analysts. While describing APT as being expensive, it continued to re-rate the stock anyway, doubling its original target price. The true reasons? Their original estimates were wrong so they have to now mark it closer to what it trading at. Who needs an analyst who cannot make an appropriate assessment of what its valuation OUGHT TO BE instead of following the price - FIXATED WITH THE PRICE as I mentioned often here. If an analyst can double the price target in a short period, it either says they now have a position or they were completely off the ball or even perhaps they have been right (when I say right I meant what its true valuation ought to be) but too embarrassed to stay with the conviction.
Well, if right means what the price is , then I guess Hertz would also be worth the $5 it was trading at (despite being Chapter 11). Or BIG was rightly where it was trading at as the BIG holders would tell you before it all crumbled.
APT at $70 is a big bubble ! Ah, but so is Tesla ! Perhaps APT would get taken over at a higher valuation and all the naysayers proven wrong. Perhaps it could also be false optimism built on nothing more than market exuberance totally fixated with its continuing upward trajectory, after all just 3 plus months ago, people were willing to sell it for $9 and nothing much has really changed to its business other than a 5% acquisition from Ten Cent .
But short - no I never short stocks! Anyone who short Tesla would have been killed !
