Q: Since I have lots of question credits, I can't resist getting your take on group-think in the analyst community and their apparent capitulation to the madness of crowds.
In a Feb 2 report, previewing OTEX' upcoming quarterly report, TD reduced their price target from US$40 to US$28 (and I quote) due to lower peer valuations. Is the madness of crowds influencing the analyst?
And yet TD's earnings forecast is US$4.17 in 2026 and US$4.84 in 2027, representing a P/E ratio of 5.5 and 4.75 respectively on a US$23 share price, which is around where it traded today. Even on its old US$40 price target, the 2027 multiple is only 8.3 times forecast earnings Does TD not believe its own earnings forecast? If you are sticking with your earnings forecast, then why not stick to a reasonable price target?
In a Feb 2 report, previewing OTEX' upcoming quarterly report, TD reduced their price target from US$40 to US$28 (and I quote) due to lower peer valuations. Is the madness of crowds influencing the analyst?
And yet TD's earnings forecast is US$4.17 in 2026 and US$4.84 in 2027, representing a P/E ratio of 5.5 and 4.75 respectively on a US$23 share price, which is around where it traded today. Even on its old US$40 price target, the 2027 multiple is only 8.3 times forecast earnings Does TD not believe its own earnings forecast? If you are sticking with your earnings forecast, then why not stick to a reasonable price target?
5i Research Answer:
Analysts tend to both follow other analysts and follow prices. When a stock declines, invariably...