They do also reflect, for example, the industry’s valuation multiples and a justified valuation level should a certain scenario materialize. They also help an investor determine their own target price for a company based on how they view the company’s prospects compared to the analyst’s view.
Target prices are a good part of stock analysis. But if you only stare at the target price and the recommendation, it’s a bit like watching a 90-minute movie while skipping the first 88 minutes.