The bottom-up analysts always get left in the dust coming off a low. >60% of stocks now trading ABOVE their average analyst price target… check the 2003 and 2009 lows for comps. $SPX, @StrategasRP, #stocks pic.twitter.com/BbaUaKYsfS
— Chris Verrone (@verrone_chris) June 9, 2020
Today’s Chart of the Day was shared on Twitter by Chris Verrone of Strategas Research (@verrone_chris). Chris highlights another historical extreme; 61% of stocks in the S&P 500 are trading above their average analyst price target. He notes, “The bottom-up analysts tend to be late near market lows.” Readings over ~37% from this indicator are rare and have only occurred twice in the past two decades – 2003 & 2009. Both instances occurred a few months after a major secular low. If stocks continue to trade above expectations, it wouldn’t be surprising to see analysts ratchet up their price targets in an attempt to save face. A flurry of analyst upgrades would be yet another bullish tailwind for stocks over time.