How we set a price target

Haverhill Financial Research · Method · October 11, 2026

A price target is our estimate of what a share is worth one year from now. We never get it from a single forecast. For every company we build three versions of the future, a bear case, a base case and a bull case, put a value on the shares in each, and then weight them by how likely we think each is. The weighted result, rounded, is the target.

Each scenario is a full set of assumptions: revenue growth, profit margins and the valuation multiple the market will pay at the end. For a drug company it also includes whether the drug is approved and how fast it sells. We write down what has to be true for each scenario, which is what the valuation table in each of our reports shows.

We value each scenario as of one year out, in October 2027 for our current reports, using the method that best fits the business: earnings or cash-flow multiples for profitable companies, and risk-adjusted peak sales for clinical-stage biotechs. The result is a value per share in each scenario.

We assign a probability to each scenario, and multiply. Take Broadcom: our bear, base and bull cases came to $262, $424 and $605 a share. Weighted 25%, 50% and 25%, that gives about $429, which we rounded to a target of $430.

Weighting matters most when the outcomes are far apart. For SELLAS, the cases ranged from $1.42 to $21.74. We put 45% on the bear case, 35% on the base and 20% on the bull, which gives about $7.13, and a target of $7. Most of that value comes from a 20% chance of a large win, which is exactly the kind of risk a single number can hide.

Only after the target is set do we compare it with the current share price. A target well above the price leads to a Buy, one close to it a Hold, and one well below it a Sell. That is why we put the valuation at the end of each report rather than the rating at the top: the rating is an output, not a starting point.

It is not a prediction that the stock will hit that price on a particular day. It is our best estimate of fair value under stated assumptions, and it changes when the facts do. When a trial reads out, a quarter surprises or guidance moves, we update the scenarios and the target with them. You can read the full method in practice in our SELLAS report and our ImmunityBio report.

Figures come from Haverhill Financial Research reports on Broadcom, Nebius, ImmunityBio and SELLAS Life Sciences, which cite the companies' own filings and releases.

Disclosures. Haverhill Financial Research is a publisher of general financial commentary. This article is not personalized investment advice and does not consider any reader's financial situation; readers should do their own research. Nothing here is a recommendation to buy or sell any security. Company figures and guidance can change. The author of this post does not hold positions in the companies named. Data as of October 11, 2026.