Analysts are Saying Buy This Stock: Highwoods Properties, Inc. (NYSE:HIW)

Wall street brokerage firm analysts are offering a consensus “Buy” rating on shares of Highwoods Properties, Inc. (NYSE:HIW).  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 2.30 on the shares.  Based on a recent trade, the shares are hovering around $42.72 which, according to analysts, yield significant upside potential to the $50.45 consensus target price.

Value investors may be scanning the shelves for bargain stocks. They may be looking to spot those shares that haven’t been doing a whole lot and are being generally overlooked by the investing world. Value investors may be searching for stocks with lower price to earnings ratios that possess higher dividend yields. Investors looking for growth stocks may be willing to shell out a little more for a stock that has the possibility of increasing EPS at a quicker pace. Some investors may favor one category of stocks over another, but they may need to find a combination at some point. As markets tend to move in cycles, it may be necessary to align the portfolio to the category that is best positioned to make consistent gains in the future.

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 

Highwoods Properties, Inc. (NYSE:HIW)’s shares may have a significant upside to the consensus target of 50.45, but how has it been performing relative to the market?  The stock’s price is 42.72 and their relative strength index (RSI) stands at 38.90.  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.  

Highwoods Properties, Inc. (NYSE:HIW) shares are moving -1.97% trading at $42.72 today.

Investors may be trying to define which trends will prevail in the second half of the year. As the markets continue to chug along, investors may be trying to maximize gains and become better positioned for success. Technical analysts may be studying different historical price and volume data in order to help uncover where the momentum is headed. Coming up with a solid strategy may take some time, but it might be well worth it in the long run. As we move deeper into the year, investors will be closely tracking the next few earnings periods. They may be trying to project which companies will post positive surprises.