How The Pieces Add Up: RYF Targets $49

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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 Guggenheim S&P 500 Equal Weight Financials ETF (Symbol: RYF), we found that the implied analyst target price for the ETF based upon its underlying holdings is $48.95 per unit.

With RYF trading at a recent price near $43.97 per unit, that means that analysts see 11.33% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of RYF's underlying holdings with notable upside to their analyst target prices are Marsh & McLennan Companies Inc. (Symbol: MMC), Intercontinental Exchange Inc (Symbol: ICE), and Huntington Bancshares Inc (Symbol: HBAN). Although MMC has traded at a recent price of $82.43/share, the average analyst target is 12.82% higher at $93.00/share. Similarly, ICE has 12.67% upside from the recent share price of $71.73 if the average analyst target price of $80.82/share is reached, and analysts on average are expecting HBAN to reach a target price of $17.16/share, which is 12.06% above the recent price of $15.31. Below is a twelve month price history chart comparing the stock performance of MMC, ICE, and HBAN:

MMC, ICE, and HBAN Relative Performance Chart

Below is a summary table of the current analyst target prices discussed above:

NameSymbolRecent PriceAvg. Analyst 12-Mo. Target% Upside to Target
Guggenheim S&P 500 Equal Weight Financials ETFRYF$43.97$48.9511.33%
Marsh & McLennan Companies Inc.MMC$82.43$93.0012.82%
Intercontinental Exchange IncICE$71.73$80.8212.67%
Huntington Bancshares IncHBAN$15.31$17.1612.06%

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: RYF , MMC , ICE , HBAN

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