Don't take stock analysts call on stock seriously.

Have you ever read analyst report recommending a certain stock and putting it at "Outperform/overweight" and have a Target Price(TP) or Sum of the parts (SOTP) at $4.20?

You bought into their story and buy thinking it's a steal. Only to have the very same analyst "downgrade/underperformed/underweight" the same stock a month later with a TP or SOTP of $2?

All I can say is "DO NOT TAKE THE REPORTS SERIOUSLY". The analysts with their CFAs and what have you are only as good as you and me. Their estimates are as good as yours or mine. Their ratings and price targets are moving targets.

So, what should you be trying to get from the reports? Well, they did their research and often have access to more in-depth information than us. So, they have nicely summarized their findings and present it with their point of view. What you need to do is ignored their point of view and take the FACTS and form your own judgement and price.

At the end of the day, you might be as "right" as them. But hey, at least you learn something and will progress your investment skills/experience rather than relying totally on analysts ratings/price targets.

So instead of listening to analysts, do your own research and ask the right questions, like these:

• Can the company rebound to its historic price-to-earnings ratio?
• Is the market undervaluing a company?
• Can it continue to generate healthy cash flow and earnings?
• Will it be able to pay dividends and interest payments on debt?