How The Parts Add Up: PPH Headed For $69

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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 Pharmaceutical ETF (Symbol: PPH), we found that the implied analyst target price for the ETF based upon its underlying holdings is $68.51 per unit.

With PPH trading at a recent price near $62.39 per unit, that means that analysts see 9.81% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of PPH's underlying holdings with notable upside to their analyst target prices are Novo-Nordisk AS (Symbol: NVO), GW Pharmaceuticals plc (Symbol: GWPH), and AmerisourceBergen Corp. (Symbol: ABC). Although NVO has traded at a recent price of $48.51/share, the average analyst target is 24.51% higher at $60.40/share. Similarly, GWPH has 20.90% upside from the recent share price of $139.68 if the average analyst target price of $168.88/share is reached, and analysts on average are expecting ABC to reach a target price of $97.50/share, which is 15.93% above the recent price of $84.10. Below is a twelve month price history chart comparing the stock performance of NVO, GWPH, and ABC:

NVO, GWPH, and ABC Relative Performance Chart

Combined, NVO, GWPH, and ABC represent 11.35% of the Pharmaceutical ETF. 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
Pharmaceutical ETF PPH $62.39 $68.51 9.81%
Novo-Nordisk AS NVO $48.51 $60.40 24.51%
GW Pharmaceuticals plc GWPH $139.68 $168.88 20.90%
AmerisourceBergen Corp. ABC $84.10 $97.50 15.93%

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.

10 ETFs With Most Upside To Analyst Targets »

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , ETFs
Referenced Symbols: PPH , NVO , GWPH , ABC

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