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I think he may mean compared to his position. If you sort 1B this year by slug, there are 26 qualified guys. Numbers 12, 13, and 14 (middle of the pack) are Matt Adams, Freddie Freeman, and Chris Davis. Their ISO's are .203 .199 and .192 respectively. So a .200 ISO would put you middle of the pack at 1B. I think most of us in this thread would agree that at least for his first couple years, a .200 ISO would be closer to his upside than his mid projection. I think his ISO out of the gate a year and half from now or so will be in the 160-190 range. Does he have upside to get to .220 or beyond? I think so. But again, unless his walk rate jumps significantly, it HAS too for him to become a guy you want to have at 1B for 5 years, because he isn't going to provide value anywhere else. If he's giving you 270/320/450 as a pre arb guy, sure, that is valuable to an extent. In our park, that would put him in the 120 wRC+ neighborhood.
An obvious comparison that I hadn't thought of until now would be Kendrys Morales last year. He put up a 277/336/449 last year in Safeco, good for a 117 wRC+. To me that's DJ's higher end projection.
Another decent comparison would be Michael Saunders, who this year has a 275/330/430 line, which comes to a 112 wRC+. When you account for the RHB penalty Safeco imposes, would a mid projection be all that far off from that line for Peterson? That's about a .160 ISO, with an 8% BB rate and a 23% K rate. That seems a very reasonable mid projection to me. I should clarify that by MID projection, I mean he does still improve some from now until he reaches MLB. A low projection would imply that he doesn't improve much as at all, and what he is now is what you're going to get. If that's the case, he's definitely not worth having on a ML roster.
What would his upside be? I ask you because you've obviously followed him for some time, you seem to have a good grasp on what he could do if everything clicked. Is he a guy that could get his K% down around the 15% mark? Does he have enough natural power to be in the .220+ ISO club?