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Analysts create 1 year price targets to determine these ratings. Lets say an analyst sees CNXS at $12 and based on research sets target at $18. At this point the stock would be a buy. Stock then runs up to $18 in a couple months. The analyst has to do something; saying a stock is a buy when it hits its price target prematurely is not an appropriate investing call. So either they have to rasie their price target or change their stock rating (or both). If raising the price target is not warranted then the rating will be cut.

The problem is that when you consider short term volatility taking a snapshot of the stock and base a rating on the price/value at that time doesn't mean it applies a week later. Also, analysts have outlooks that most people don't have; I'd say most people buying stocks have generally very short or very long outlooks.

I also think this kind of activity makes more sense on a stock like KO, WMT, etc, where IV calculations come with far more certainly. Even "conservative" valuations for CNXS can range from $10 to $20 because they have been less than perfect from an execution standpoint for years. Mix that with stock volatility, and you think analyst ratings are very meaningful (if they ever were) after even 1 week?
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