The stock of Southwest Airlines Company (NYSE:LUV) has 1-year target price of $55.25 while the median projection is $55.5. The highest estimate is $67 and the lowest forecast is $46. The estimates show a standard deviation of 7.363%.
None of the market experts have a crystal ball that aids them to forecast the future price accurately. However, if they take a few basic assumptions, they can release more accurate price estimation. It is called as intrinsic value. Computing anticipated stock price, however, works for specific shares.
For new companies with erratic dividends and financial performance, and rapid growth, the stock price projection is quite a tough task. If there had been any valuation mechanism, the market would have gauged the jump in Amazon’s stock. In the past decade, it had surged more than 1000%.
Many investment groups have self-advanced valuation processes to predict market prices. These methods are group specific, but are also globally applicable. There are external factors that impact stock prices and too many variables affecting stock prices of new start-ups.
At the same time, investors find it easy to reach the market valuation of old companies, with a steady dividend record.
As of 2016-07-15, Southwest Airlines Company (NYSE:LUV) stock has an ABR of 1.55 based on calls of 8 experts.
Stock valuation is the means of computing theoretical values of companies and their shares. It is used to predict potential or future market prices, and thus to benefit from price movement. Stocks that are projected undervalued against the theoretical value are stated as good candidates to buy, while it is exact opposite with overvalued equities.
Markets Daily
Southwest Airlines shares has a median target of $55.5
