Bull, base and bear: what the current scenarios can tell you
The fixed multipliers behind the labels and how to build a better research hypothesis.
An illustration, not a company price target
The current scenario generator uses the same price multipliers for each stock: bull = reference price × 1.28, base = price × 1.06 and bear = price × 0.78. The numeric calculation does not use company-specific revenue forecasts, valuation models or a stated investment horizon.
For an illustrative reference price of $100, the displayed prices are $128, $106 and $78. The bull outcome implies +28%, the base +6% and the bear −22%. These are arithmetic examples of movement, not forecasts about a particular issuer.
The percentages are not calibrated odds
The scenario confidence labels are fixed at 52, 58 and 55 in the current generator. They are not mutually exclusive probabilities and must not be added together to infer a distribution. They are also separate from the coverage-derived confidence accompanying the FINVERCO Score.
No stated horizon means these scenario prices cannot be treated as twelve-month targets or as a short-term expected return. Generic assumptions such as momentum persistence do not establish why a particular business should earn a different valuation.
Write the mechanism before the target
A company-specific scenario needs a chain of reasoning: a business driver changes, financial results respond, and a valuation assumption connects those results to price. Specify which links are observable and which remain assumptions. A different ticker inserted into the same wording is not that chain.
For example, a semiconductor study might test revenue concentration and cash conversion; a lender’s study might test credit losses and funding costs. Those mechanisms need different evidence even when both charts look strong.
What can invalidate a bull case?
Invalidate the mechanism rather than merely waiting for the share price to disagree. If your premise requires repeatable margin improvement, a one-time accounting benefit does not confirm it. If it requires broad demand, growth concentrated in one customer or end market deserves further checking.
- Name the reporting period and source for every input.
- State a time horizon before discussing a target.
- Separate operating assumptions from valuation assumptions.
- Do not interpret fixed scenario labels as measured success probabilities.
Sources and evidence
The editorial policy explains AI assistance and the limits of these studies.
Continue your research
A FINVERCO research checklist: price, score and value
Keep three different questions separate, then connect evidence into a company-specific thesis.
AAPL: separate repeatable margin from a one-time benefit
An earnings-quality case study that keeps arithmetic adjustments distinct from official metrics.