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My inner cynist asks: So when a company beats whatever targets set by analysts, the stock goes up. What happens if analysts deliberately set targets that they

My inner cynist asks: So when a company beats whatever targets set by analysts, the stock goes up. What happens if analysts deliberately set targets that they believe the company would have slim chance of achieving? What if only some (arguably optimistic) analysts set a high target which the pessimists act on? I think it's likely I have some fundamental misunderstandings on how "targets" work in general, but I can't help but feel that "all Tesla news can and will be interpreted as a weakness"...

xwdv 7y ago
Then they wouldn’t be good analysts and people wouldn’t give a sentient fuck about them.
redler 7y ago
There’s a big market for the services of analysts who hit close to the mark. The size of that market exceeds the size of the market for analysts who miss, intentionally or otherwise.
yellow_lead 7y ago
You may see one bank's analysts do this, but others should balance them out. If one bank's analysts are routinely off every quarter, no one will listen. All the analysts could conspire to set impossible targets, but the only way to profit would be considered illegal. For this reason bank's have a Chinese wall between analysts and traders. On a similar topic, I think it's common to see CEOs try to mislead analysts into lowering their targets. I believe this happened with Apple for a long time, but to the same effect - analysts stopped listening to Cook's guidance.
deleted 7y ago
[deleted]
microtherion 7y ago
It's somewhat odd that the stock is benchmarked against conservative analyst estimates, instead of against the predictions of the company's own CEO: https://twitter.com/elonmusk/status/1098013283372589056 https://twitter.com/elonmusk/status/1098013283372589056 Any Tesla cheerleaders willing to bet that Tesla will build ~340k cars in 2H2019? Or is this another "LOL, nothing that Musk says matters" moment?
- tigershark 7y ago
  He said that Tesla will be able to build 500k cars per year by the end of the year. It absolutely doesn’t mean that they will build 500k cars this year. Btw his predictions of ~400k deliveries for the year wouldn’t be that far off if they continue to deliver ~100k cars per quarter like in the current quarter.
  - zaroth 7y ago
    In my opinion hitting the FY19 numbers will depend on getting production running in Shanghai. I think they’ll need 20k cars Made in China to get solidly into 360k+ territory. Currently lines will make ~1,000 per day. The Shanghai line will be the next big leg up in volume. When it turns on will determine the year end volume.
  - microtherion 7y ago
    Oh, he has said all sorts of things, e.g. 420k - 600k: https://www.livemint.com/companies/people/elon-musk-s-new-forecast-for-2019-up-to-600-000-cars-1551413855883.html https://www.livemint.com/companies/people/elon-musk-s-new-fo... YTD, they delivered 160k, so it would take 120k a quarter to get them to 400k cars in 2019, or 130k to get them to 420k cars. I'll take the under.

xwdv 7y ago

Then they wouldn’t be good analysts and people wouldn’t give a sentient fuck about them.

redler 7y ago

There’s a big market for the services of analysts who hit close to the mark. The size of that market exceeds the size of the market for analysts who miss, intentionally or otherwise.

yellow_lead 7y ago

You may see one bank's analysts do this, but others should balance them out. If one bank's analysts are routinely off every quarter, no one will listen. All the analysts could conspire to set impossible targets, but the only way to profit would be considered illegal. For this reason bank's have a Chinese wall between analysts and traders. On a similar topic, I think it's common to see CEOs try to mislead analysts into lowering their targets. I believe this happened with Apple for a long time, but to the same effect - analysts stopped listening to Cook's guidance.

deleted 7y ago

[deleted]

microtherion 7y ago

It's somewhat odd that the stock is benchmarked against conservative analyst estimates, instead of against the predictions of the company's own CEO: https://twitter.com/elonmusk/status/1098013283372589056 https://twitter.com/elonmusk/status/1098013283372589056 Any Tesla cheerleaders willing to bet that Tesla will build ~340k cars in 2H2019? Or is this another "LOL, nothing that Musk says matters" moment?

tigershark 7y ago
He said that Tesla will be able to build 500k cars per year by the end of the year. It absolutely doesn’t mean that they will build 500k cars this year. Btw his predictions of ~400k deliveries for the year wouldn’t be that far off if they continue to deliver ~100k cars per quarter like in the current quarter.
- zaroth 7y ago
  In my opinion hitting the FY19 numbers will depend on getting production running in Shanghai. I think they’ll need 20k cars Made in China to get solidly into 360k+ territory. Currently lines will make ~1,000 per day. The Shanghai line will be the next big leg up in volume. When it turns on will determine the year end volume.
- microtherion 7y ago
  Oh, he has said all sorts of things, e.g. 420k - 600k: https://www.livemint.com/companies/people/elon-musk-s-new-forecast-for-2019-up-to-600-000-cars-1551413855883.html https://www.livemint.com/companies/people/elon-musk-s-new-fo... YTD, they delivered 160k, so it would take 120k a quarter to get them to 400k cars in 2019, or 130k to get them to 420k cars. I'll take the under.