IIn recent trades, shares of Sonoco Products Co. (Symbol: SON) exceeded analysts’ 12-month average target price of $63.20, changing hands at $63.70/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 5 different analyst targets in Zacks coverage universe that contribute to this average for Sonoco Products Co., but the average is just that – a mathematical average. Some analysts have below average targets, including one looking for a price of $58.00. And then, on the other side of the spectrum, an analyst has a target as high as $69.00. The standard deviation is $4.438.
But the whole reason to watch the Medium SON’s award goal is first and foremost to tap into a “wisdom of the crowds” effort, bringing together the contributions of all the individual minds that have contributed to the ultimate number, contrary to the belief of any single expert in particular. And so, with SON surpassing that average target price of $63.20/share, SON investors received a good signal to spend another time evaluating the company and deciding for themselves: is 63 $.20 is 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 Sonoco Products Co.:
|Recent SON analyst ratings breakdown|
|»||Running||1 month ago||2 months ago||3 months ago|
|Strong buy odds:||1||1||1||1|
|Strong selling odds:||0||0||0||0|
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 Zacks latest research report on SON – 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.