Thanks for the comment. Of course, I don’t buy stocks impulsively based solely on the target price, even though my post yesterday might have suggested that when I was asking about the logic behind the target price. I also strive to familiarize myself with companies through their financials, products, history, and the market before making any decisions. Saab is no exception to this.
Downplaying the target price as “just the end product of the analysis” is an interesting perspective in itself. I understand that the analysis is a whole and the target price + recommendation are its summary, but that’s exactly why it should be particularly important. I see the target price and the recommendation as the summary of the analysis, and these should naturally be in line with each other. The outcome is, after all, what the analyst uses to take a stand on whether they believe the stock is attractive or not. If the outcome of the analysis isn’t significant, then why is the analysis being done in the first place?
And as for that “profound expertise,” that’s exactly what an investor does—going through the company’s order backlog, margins, cash flow, competitive position, product mix, technology, and strategy. In this case, my question didn’t concern these details, but a much simpler matter: why does Inderes’ target price (310 SEK) deviate so drastically from the market price (~600 SEK) and the levels of other analysts (closer to 700 SEK)? That was the reason why I originally started questioning it yesterday.
So, I’m still not claiming to know the “correct” price for Saab—definitely not. However, perhaps I know whether it’s worth putting on my “buy, hold, or sell pants” right now. But when one analyst is at 300 and others are at 600–700, I think it’s perfectly justified to ask where such a large difference comes from. That’s what I was trying to figure out yesterday, and I don’t think I did so in an unreasonable manner.