In recent trading, shares of Royal Bank of Canada (Montreal, Quebec) (NYSE: RY) have crossed above the average analyst 12-month target price of $62.57, changing hands for $62.77/share. When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level. Analyst reaction may also depend on the fundamental business developments that may be responsible for driving the stock price higher — if things are looking up for the company, perhaps it is time for that target price to be raised.
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