Texas capital

Texas Capital Bancshares Hits Analysts Price Target

IIn recent trades, shares of Texas Capital Bancshares Inc (Ticker: TCBI) exceeded analysts’ 12-month average target price of $62.20, changing hands at $62.98/share. When a stock reaches the target that an analyst has set, there are logically two ways for him to react: downgrade on the valuation, or readjust his target price to a higher level. The reaction of analysts may also depend on fundamental business developments that may be responsible for the rise in the stock price – if things are looking up for the company, it may be time for that target price to be raised.

There are 10 different analyst targets in Zacks’ coverage universe that contribute to this average for Texas Capital Bancshares Inc, but the average is just that – a mathematical average. Some analysts have below average targets, including one looking for a price of $52.00. And then, on the other side of the spectrum, an analyst has a target as high as $75.00. The standard deviation is $7.208.

But the whole reason to watch the medium TCBI’s award goal is first and foremost to tap into a “wisdom of the crowds” effort, bringing together the contributions of all the individual minds that have contributed to the ultimate number, as opposed to what a single particular expert believes. And so, with TCBI surpassing that average target price of $62.20/share, TCBI investors received a good signal to spend another time evaluating the company and deciding for themselves: is 62 $.20 is just one stop on the way to a par upper target, or has the valuation been stretched to the point that it’s time to think about removing some chips from the table? Below is a chart showing the current thinking of analysts who cover Texas Capital Bancshares Inc:

Recent TCBI Analyst Rating Breakdown
» Running 1 month ago 2 months ago 3 months ago
Strong buy odds: 3 3 3 3
Purchase notice: 0 0 1 1
Hold Notes: 5 5 5 5
Sale Ratings: 0 0 0 0
Strong selling odds: 1 1 1 1
Average grade: 2.56 2.56 2.5 2.5

The average rating shown in the last row of the table above ranges from 1 to 5, where 1 is strong buying and 5 is strong selling. This article used data provided by Zacks Investment Research via Quandl.com. Get the latest Zacks research report on TCBI – FREE.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.