Shares of Nurix Therapeutics, Inc. (NRIX) have gained 3.1% over the past four weeks to close the last trading session at $21.09, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $26.42 indicates a potential upside of 25.3%.

The mean estimate comprises 12 short-term price targets with a standard deviation of $5.95. While the lowest estimate of $15 indicates a 28.9% decline from the current price level, the most optimistic analyst expects the stock to surge 66% to reach $35. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.

While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.

However, an impressive consensus price target is not the only factor that indicates a potential upside in NRIX. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.

Price, Consensus and EPS Surprise

Here's What You Should Know About Analysts' Price Targets

According to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.

While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?

They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.

However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.