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Sell-Side Offering Their Recommendations on Wayfair Inc. (NYSE:W)

Analysts on the sell-side are offering a consensus “Buy” rating on shares of Wayfair Inc. (NYSE:W).  Using the following ratings scale: 1.0 Strong Buy, 2.0 Buy, 3.0 Hold, 4.0 Sell and 5.0 Strong Sell, analysts have an average recommendation of 2.40 on the shares.  Based on a recent trade, the shares are hovering around $158.91 which, according to the Street, yields significant upside potential to the $159.35 consensus price target

Dedicated investors often strive hard to set themselves up for success. Finding long-lasting success in the stock market may not be an easy endeavor. The mindset of a short-term trader may differ greatly from that of a long-term investor. Investors often have to be prepared for many different situations. Obtaining the proper knowledge about stocks and the investing world is typically a main goal for active traders and investors. Once the investor is armed with knowledge, they may be able to see things that others cannot. This may involve staying up to date on various fundamentals, technicals, and macro-economic conditions. 

Wall Street firms hire hundreds of analysts who provide recommendations on stocks.  Typically, these analysts look at a company’s fundamentals, building financial models from this information in order to project future trends, specifically future earnings. 

These projections are then used as a basis for providing “buy” or “sell” recommendations.  Many investors consider these recommendations very seriously, and often times whenever an analyst changes their outlook on a stock, the price change almost immediately.

Analyst recommendations should be approached with caution for many reasons.  Many times a conflict of interest arises due to the relationship between company that they work for and the company whose stock they are paid to track. 

Often, analysts are responsible for creating reports on companies that are currently or could potentially be a client of their employer.  Analysts don’t want to offend any companies that could possibly be a potential client down the road, so they are inclined to put a positive spin on the stock. 

Beyond issuing buy, sell, or hold recommendations, analysts also create earnings estimates.  These are earnings per share (EPS) numbers that analysts believe a particular company will report on its next statement.  These estimates have been growing in importance on Wall Street over the years, because the companies that “beat” their estimates usually see their stock prices grow while those who don’t usually watch them shrink.

RSI 

Wayfair Inc. (NYSE:W)’s shares may have a significant upside to the consensus target of 159.35, but how has it been performing relative to the market?  The stock’s price is 158.91 and their relative strength index (RSI) stands at 64.01.  RSI is a technical oscillator that shows price strength by comparing upward and downward movements.  It indicates oversold and overbought price levels for a stock.  

Wayfair Inc. (NYSE:W) shares are moving 1.02% trading at $158.91 today.

New investors may be looking at the soaring stock market and wondering if now is a good time to try and get in on the action. Leaping into the market without proper research or a solid plan may leave the investor on the short end of the stick. Creating a stock investing plan can be as simple or complex as the individual chooses. Sometimes, keeping things simple may be the best way to go. Other times, there may be more than meets the eye, and a deep-dive into the crucial data may be required. New investors may be extremely excited to start buying stocks. They may have heard some great water cooler talk about the next big stock. There is always a possibility that the hot stock chatter may end up coming to fruition, but it could just as likely turn out to be terribly erroneous. Many individuals in the financial world will be quick to provide these can’t lose picks, but until this information is thoroughly researched, investors may want to proceed with caution.

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