Does Iovance Biotherapeutics (IOVA) have the potential to rally at 49% as Wall Street analysts predict?
Iovance Biotherapeutics (IOVA) closed the last trading session at $ 26.42, gaining 16% in the past four weeks, but there could be a lot of upside in the stock if the short-term price targets set by Wall Street analysts are a guide. The average price target of $ 39.36 indicates upside potential of 49%.
The average estimate includes 11 short-term price targets with a standard deviation of $ 12.08. While the lowest estimate of $ 18 indicates a decline of 31.9% from the current price point, the most bullish analyst expects the stock to rise 127.1% to reach 60 $. It is very important to note the standard deviation here, as it helps to understand the variability of the estimates. The smaller the standard deviation, the greater the agreement between analysts.
While the consensus price target is highly sought after by investors, the ability and impartiality of analysts to set price targets has long been questionable. And investors making investment decisions solely on the basis of this tool would no doubt be doing themselves a disservice.
However, an impressive consensus price target isn’t the only factor pointing to a potential rise in IOVA. This view is reinforced by the agreement among analysts that the company will report better earnings than they had estimated earlier. While a positive trend in earnings estimate revisions gives no idea of how much the stock has risen, it has been shown to be effective in predicting a rise.
Price, consensus and EPS Surprise
Here’s what you might not know about analyst price targets
According to researchers at several universities around the world, a course target is one of many pieces of information about a stock that misleads investors far more often than it guides them. In fact, empirical research shows that the price targets set by multiple analysts, regardless of the scope of the deal, rarely indicate where a stock’s price might actually be heading.
While Wall Street analysts have a deep understanding of a company’s fundamentals and the sensitivity of its business to economic and industrial issues, many tend to set overly bullish price targets. You wonder why ?
They usually do this to generate interest in the stocks of companies with which their companies do business or seek to partner. In other words, the commercial incentives of companies covering a security often result in inflated price targets set by analysts.
However, a tight grouping of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement on the direction and magnitude of a stock’s price movement. While this doesn’t necessarily mean the stock will hit the mid price target, it could be a good starting point for further research to identify potential fundamental driving forces.
That said, while investors shouldn’t ignore price targets entirely, making an investment decision based solely on them could result in a disappointing ROI. Thus, price targets should always be treated with a high degree of skepticism.
Why IOVA could be witnessing a solid advantage
Growing optimism among analysts about the company’s earnings outlook, as evidenced by strong agreement between them to revise EPS estimates upwards, could be a legitimate reason to expect the profit to rise. action. This is because empirical research shows a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current year, an estimate has increased in the last 30 days compared to no negative revision. As a result, Zacks’ consensus estimate rose 0.4%.
Additionally, IOVA currently has a Zacks Rank # 2 (Buy), which means it is in the top 20% of over 4,000 stocks which we rank based on four factors related to earnings estimates. Given an impressive externally audited history, this is a more conclusive indication of the upside potential of the stock in the short term. You can see the full list of today’s Zacks Rank # 1 (strong buy) stocks here >>>>
Therefore, while the consensus price target may not be a reliable indicator of what IOVA could earn, the direction of the price movement it implies appears to be a good guide.
Boom in infrastructure stocks will sweep America
A massive push to rebuild crumbling American infrastructure will soon be underway. It is bipartisan, urgent and inevitable. Billions will be spent. Fortunes will be made.
The only question is, “Are you going to jump into good stocks early when they have the greatest potential for growth?” “
Zacks published a special report to help you do just that, and today it’s free. Discover 7 special companies looking to make the most of the construction and repair of roads, bridges and buildings, as well as transporting goods and transforming energy on an almost unimaginable scale.
Download FREE: How to Profit from Trillions in Infrastructure Spending >>
Iovance Biotherapeutics, Inc. (IOVA): Free Stock Analysis Report
To read this article on Zacks.com, click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Comments are closed.