How it is worked out
In Ploutos AI's analyses it comes from several methods together: a DCF on free cash flow and the multiples of the company's peer group (else its sector), with methods of their own for banks, REITs, insurers and utilities. The range runs from the lowest method to the highest, and the one figure shown is their weighted midpoint.
How to read it
- It is a model's estimate, not a price target and not a forecast of where the price will go.
- The closer the methods fall to each other, the narrower the range. When they are far apart the estimate says less, and the confidence grade shows it.
- It moves with every new report and with interest rates, which change the return a buyer asks for. The free company pages show no fair value; only the analyses do.
Example
Three methods give $80, $95 and $100: the range is $80 to $100 and its midpoint, say, $92. With the share at $70, the price is $22 below the midpoint.