Q: Trying to understand recent moves of TFII. It continues to drift lower but analysts are posting reports with buy recommendations well over current price. Can you shed light on what, if any relationship, there is between stock price and analyst recommendations and target prices? I know its not a linear relationship but what?
5i Research Answer:
There is some correlation between analysts' prices and stock prices, but it is not high. Analysts tend to 'follow' stock prices, both up and down, moving targets lower after bad news and vice versa. With recent earnings and comments and concerns on the economy and rates/inflation most cyclical stocks are drifting, at best, these days. TFII is still up for the year and only a bit behind the TSX's YTD return. It is doing better than peers. TFII stock is back to where it was in February. It now has 16 analysts at BUY and three at HOLD, with no SELLs.