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 Invesco S&P 500 Downside Hedged ETF (Symbol: PHDG), we found that the implied analyst target price for the ETF based upon its underlying holdings is $31.95 per unit.
With PHDG trading at a recent price near $28.03 per unit, that means that analysts see 13.98% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of PHDG’s underlying holdings with notable upside to their analyst target prices are T Rowe Price Group Inc. (Symbol: TROW), FMC Corp. (Symbol: FMC), and CBS Corp (Symbol: CBS). Although TROW has traded at a recent price of $100.21/share, the average analyst target is 23.24% higher at $123.50/share. Similarly, FMC has 22.65% upside from the recent share price of $84.86 if the average analyst target price of $104.08/share is reached, and analysts on average are expecting CBS to reach a target price of $66.32/share, which is 22.10% above the recent price of $54.32. Below is a twelve month price history chart comparing the stock performance of TROW, FMC, and CBS:
summary table of the current analyst target prices discussed above:
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