Financial analysts calculate a one-year target price for a publicly traded stock by combining fundamental valuation models—such as discounted cash flow (DCF) analysis, price-to-earnings (P/E) multiples, and sum-of-the-parts evaluations—with projected future earnings, revenue growth rates, and sector-specific catalysts over the next twelve months. Equity research experts aggregate these financial projections, adjust for macroeconomic assumptions and corporate risk factors, and establish a consensus consensus price target representing their expectation of where the stock will trade in a year.