Astonishing 12 Month Target Prices for CU Reported on BMO InvestorLine: Should I Buy?!

Earlier this year, CU split its shares in a get 1 for every 1 you already own offer. Ever since I’ve been keeping a closer eye on this very conservative stock trying to decide whether to sell part of my position. (It’s up 49% over what I bought it for.) When I looked at the 12 month target prices today, however, I was astonished.


What is Canadian Utilities Trading At?

Today, CU is trading at about $37.95 per share. It’s been in a range of about $34-38 per share since the split.

What are the 12 Month Target Prices from the Analysts for CU?

That’s why I got a shock when I took a peek at the 12 month target prices for Canadian Utilities on InvestorLine.

How to Look Up 12 Month Target Prices on InvestorLine

To see these values,

  1. From the Quotes & Tools tab, select Quotes +.
  2. In the Symbol field, type CU.
  3. Click on the Go button.
  4. Scroll down to the box on the right side of the screen with Recommendations and 12 mo. Target Price.
  5. Select the 12 mo. Target Price tab.

Be amazed!

The target prices listed are $74-$88! Wow! I guess I should hold on for the ride.

Or so I thought until I looked at the Issue Date for each of these pieces of advice. They all pre-date the split. Yep, that’s all it is. BMO InvestorLine didn’t ask the Sources to update their information in light of the split, so the old pre-split numbers are still reported.

Please Use Your Brain (and Common Sense) When Researching Stocks

To me it was obvious what was going on. But another investor might not be so lucky. If you hadn’t already held CU through the split, you might not know that it had happened. After all, the graph of the trading prices for the last year has been split-adjusted so there’s no obvious clue there. The 52-week highs and lows are also reported split adjusted.

All I can suggest is if you see a wild mismatch between price and target price, dig a bit deeper. If you go back through the annual news for CU you’ll find the split. If you look at the Charts you can find the split.

How to Look Up Stock Split History on InvestorLine

  1. From the Quotes & Tools tab, select Quotes +.
  2. In the Symbol field, type CU.
  3. Click on the Go button.
  4. Click on the Charts tab.
  5. Click on the blue Events button with the small down-facing arrowhead.
  6. Select Splits with a click.
  7. On the chart will be an inconspicuous S with a circle around it. If you hover the cursor over it, you will see a comment.
    For example, this one says
    “Stock split
    June 17, 2013
    Executed a 0.5 Split”

(That means that they issued 1 additional share for every existing share.)


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2 thoughts on “Astonishing 12 Month Target Prices for CU Reported on BMO InvestorLine: Should I Buy?!

  1. I think a bigger lesson here is that you shouldn’t pay any attention to analyst targets. Analysts don’t have a better view of stock prices than market participants who have set the current price.

    • But I love to watch analyst targets! It’s more fun than most TV these days. The way they scramble to catch up after a stock shoots up or down past their projections is very reminiscent of the Three Stooges.

      On a more serious note, you’re right not to put too much weight on analyst snapshots.

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