Back when I had an investment adviser I asked him what it even meant to have a "target" for S&P or stock prices or whatever. It's not like they can control it, and they back off from saying it's a prediction. He couldn't even come up with an answer, which clued me in that the whole concept was bogus. It's just junk they foist on clients in order to sound wise.
If done legitimately, it reflects an analyst's opinion of the value of the underlying business and of the progress expected on the near-ish future.
Say I think company A would be well priced at 12x earnings (due to its operating environment, stability and what have you), and I expect 2016 earnings to be 5$ per share, I'll set a target of 60$, which corresponds to the intrinsic value that I attribute it.
Of course, there can be doubts on the legitimacy of some of these opinions, which often end up being little more than guesses.