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:
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|
|Guggenheim S&P 500 Equal Weight Financials ETF||RYF||$43.97||$48.95||11.33%|
|Marsh & McLennan Companies Inc.||MMC||$82.43||$93.00||12.82%|
|Intercontinental Exchange Inc||ICE||$71.73||$80.82||12.67%|
|Huntington Bancshares Inc||HBAN||$15.31||$17.16||12.06%|
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.
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