Reply To: Figuring out target prices for stocks

#196064
Nick Homes

    I’d start by learning:

    Price-to-Earnings (P/E) Ratio Method

    This method estimates a stock’s target price by multiplying its projected earnings per share (EPS) by an expected P/E ratio.

    Formula: Price Target = Projected EPS × Expected P/E

    Discounted Cash Flow (DCF) Method

    The DCF method determines a stock’s value by discounting its future cash flows to their present value.

    Formula: Price Target = Future Cash Flows ÷ (1 + r)^n

    Where r is the discount rate, and n is the number of periods.