There are usually four keys to determining the legitimacy of a target price:
You can do all this work yourself and come up with your own price target, but I prefer to use analyst price targets that are already readily available. We're seeking a more general target price to use as a guide, and prefer using the average consensus target price from multiple analysts. The goal is to avoid pump and dump marketing schemes and analyst bias. Seeking a consensus from multiple analysts with high and low projections is ideal. Several sites, such as Seeking Alpha, provide this type of information. To get a decent estimate, it's best to have as much analyst coverage as possible and retrieve the average estimate. This approach provides a clear and concise method for obtaining a target price for a stock.