How Analyst Price Target Upside is Calculated
Understanding the mathematical mechanics behind upside percentage calculations explains why screeners produce both extraordinary turnaround candidates and dangerous value traps.
| Metric | Mathematical Formula | Example A (Healthy Growth) | Example B (Stale Lag Trap) |
|---|---|---|---|
| Current Share Price | Market quote | $100.00 | $15.00 (plunged from $50) |
| Consensus Target | Arithmetic mean of targets | $135.00 | $45.00 (unrevised) |
| Dollar Discrepancy | Target - Current Price | +$35.00 | +$30.00 |
| Implied Upside % | ((Target - Price) / Price) * 100 | +35.0% (Realistic expansion) | +200.0% (Artificial statistical distortion) |
| Analyst Status | Target publication date | Reaffirmed 2 weeks ago | Issued 5 months ago prior to profit warning |