PE Valuation incorporating Discount Rate?

Hi all, which do you think is the correct method for PE valuation?

Most analysts use Method 1, which is to take your preferred PE Valuation, multiply it by 2-year Forward EPS and arrive at a price target, and hence an ‘upside’.

But I have also came across Method 2, which is basically taking the PE Valuation X 2 Year Forward EPS, and then adjusting it to today’s present value using the discount rate (or cost of equity) of the stock in question. This results in a downside instead.

Any thoughts? Thanks!