Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the iShares Russell 1000 Value ETF (Symbol: IWD), we found that the implied analyst target price for the ETF based upon its underlying holdings is $186.63 per unit.
With IWD trading at a recent price near $169.00 per unit, that means that analysts see 10.43% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of IWD’s underlying holdings with notable upside to their analyst target prices are (Symbol: GFS), Planet Fitness Inc (Symbol: PLNT), and Axalta Coating Systems Ltd (Symbol: AXTA). Although GFS has traded at a recent price of $59.76/share, the average analyst target is 33.24% higher at $79.62/share. Similarly, PLNT has 14.70% upside from the recent share price of $88.58 if the average analyst target price of $101.60/share is reached, and analysts on average are expecting AXTA to reach a target price of $36.42/share, which is 13.91% above the recent price of $31.97. Below is a twelve month price history chart comparing the stock performance of GFS, PLNT, and AXTA:
Below is a summary table of the current analyst target prices discussed above:
|Name||Symbol||Recent Price||Avg. Analyst 12-Mo. Target||% Upside to Target|
|iShares Russell 1000 Value ETF||IWD||$169.00||$186.63||10.43%|
|Planet Fitness Inc||PLNT||$88.58||$101.60||14.70%|
|Axalta Coating Systems Ltd||AXTA||$31.97||$36.42||13.91%|
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock’s trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.