Glossary
Base case
M3.09Also called central case, most likely case.
The forecast an analyst considers most likely, built from assumptions each of which is individually reasonable.
The trap is that a set of individually reasonable assumptions can compound into an unreasonable outcome. Margin expansion, working capital improvement and market share gain are each plausible; all three at once for five years usually is not.
Check the base case against history. If it implies performance the company has never delivered, it is a bull case wearing the wrong label.