The phrase often indicates a change in one's aims due to new information or realities. After the economic downturn, many companies had to lower their sights regarding profits.
Pro Tip 2/3
Realistic Goals
Using this phrase can suggest someone is being more realistic about their abilities or opportunities. Realizing he wasn't a strong swimmer, he lowered his sights and decided against competing in the race.
Pro Tip 3/3
Avoid Overconfidence
To 'raise your sights' can imply becoming too ambitious or overly confident about outcomes. She raised her sights too high and was disappointed when she couldn't meet her goal.