What you should know as retailer about sell-side analysts & buy-side analysts!

$NVIDIA (NVDA.US)$ If you work for an asset manager, you are not allowed to say anything publicly about a share! So, retailers ... pay attention!
The banks' price targets come from "sell-side analysts". These are analysts who provide advice to the institutions' clients as we, retailers. However, a bank also has "buy-side analysts". They provide advice to the institution itself. 

The banks emphasize that there is a CHINESE WALL between the "buy side" and the "sell side". One group of analysts works completely 'independently' of the other. So they may differ in opinion.
Arthur Levitt, a former chairman of the American stock market watchdog SEC, made the bold statement at the time: "Sell-side analysts have lost all their credibility. In 95% of the cases they say that you should buy or hold a share. As if all shares were worth buying."
Why is it that sell-side analysts always wear rose-colored glasses? Their mission is to encourage investors to make stock market TRANSACTIONS. The bank or stock broker collects transaction costs for every transaction. The sell-side analyst is also the direct contact between the bank and the listed companies. They regularly need a bank to, for example, implement a capital increase, issue bonds, take out credit or provide other services. Naturally, the companies work with a bank that always reports very > positively < about them.
However, a price target is not determined by guesswork? It must be properly substantiated. They estimate the turnover that the company will record in the coming year and charge the expected costs. They enter the profit margin the company will book and from all this a price target results.
There are two important comments here. Predicting is difficult ! So no one can subsequently accuse an analyst of being too optimistic. Remember $Super Micro Computer (SMCI.US)$ , the price target to 2000 or 200 now. And remember also the downwards movements over several months ! Be aware !