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 BuyWrite ETF (Symbol: PBP), we found that the implied analyst target price for the ETF based upon its underlying holdings is $22.98 per unit.
With PBP trading at a recent price near $20.47 per unit, that means that analysts see 12.29% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of PBP's underlying holdings with notable upside to their analyst target prices are E*TRADE
Financial Corp. (Symbol: ETFC), Morgan Stanley (Symbol: MS), and Viacom Inc (Symbol: VIAB). Although ETFC has traded at a recent price of $47.30/share, the average analyst target is 29.60% higher at $61.30/share. Similarly, MS has 27.63% upside from the recent share price of $41.82 if the average analyst target price of $53.38/share is reached, and analysts on average are expecting VIAB to reach a target price of $37.31/share, which is 26.34% above the recent price of $29.53. Below is a twelve month price history chart comparing the stock performance of ETFC, MS, and VIAB:
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 |
| Invesco S&P 500 BuyWrite ETF || PBP || $20.47 || $22.98 || 12.29% |
|E*TRADE Financial Corp. ||ETFC ||$47.30 ||$61.30 ||29.60% |
|Morgan Stanley ||MS ||$41.82 ||$53.38 ||27.63% |
|Viacom Inc ||VIAB ||$29.53 ||$37.31 ||26.34% |
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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