Surprising Analyst 12-Month Target For INDF

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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 iShares Edge MSCI Multifactor Industrials ETF (Symbol: INDF), we found that the implied analyst target price for the ETF based upon its underlying holdings is $34.66 per unit.

With INDF trading at a recent price near $31.65 per unit, that means that analysts see 9.50% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of INDF's underlying holdings with notable upside to their analyst target prices are Knight-Swift Transportation Holdings Inc (Symbol: KNX), Stanley Black & Decker Inc (Symbol: SWK), and United Technologies Corp (Symbol: UTX). Although KNX has traded at a recent price of $32.90/share, the average analyst target is 44.59% higher at $47.57/share. Similarly, SWK has 26.11% upside from the recent share price of $141.39 if the average analyst target price of $178.31/share is reached, and analysts on average are expecting UTX to reach a target price of $159.88/share, which is 18.92% above the recent price of $134.44. Below is a twelve month price history chart comparing the stock performance of KNX, SWK, and UTX:

KNX, SWK, and UTX Relative Performance Chart

Combined, KNX, SWK, and UTX represent 5.55% of the iShares Edge MSCI Multifactor Industrials 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
iShares Edge MSCI Multifactor Industrials ETF INDF $31.65 $34.66 9.50%
Knight-Swift Transportation Holdings Inc KNX $32.90 $47.57 44.59%
Stanley Black & Decker Inc SWK $141.39 $178.31 26.11%
United Technologies Corp UTX $134.44 $159.88 18.92%

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: KNX , SWK , UTX

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