Surprising Analyst 12-Month Target For QQEW

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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 First Trust NASDAQ-100 Equal Weighted Index Fund ETF (Symbol: QQEW), we found that the implied analyst target price for the ETF based upon its underlying holdings is $69.19 per unit.

With QQEW trading at a recent price near $62.64 per unit, that means that analysts see 10.45% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of QQEW's underlying holdings with notable upside to their analyst target prices are Take-Two Interactive Software, Inc. (Symbol: TTWO), Micron Technology Inc. (Symbol: MU), and NetEase, Inc (Symbol: NTES). Although TTWO has traded at a recent price of $92.14/share, the average analyst target is 44.74% higher at $133.37/share. Similarly, MU has 24.32% upside from the recent share price of $41.68 if the average analyst target price of $51.82/share is reached, and analysts on average are expecting NTES to reach a target price of $291.33/share, which is 21.12% above the recent price of $240.53. Below is a twelve month price history chart comparing the stock performance of TTWO, MU, and NTES:

TTWO, MU, and NTES Relative Performance Chart

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
First Trust NASDAQ-100 Equal Weighted Index Fund ETF QQEW $62.64 $69.19 10.45%
Take-Two Interactive Software, Inc. TTWO $92.14 $133.37 44.74%
Micron Technology Inc. MU $41.68 $51.82 24.32%
NetEase, Inc NTES $240.53 $291.33 21.12%

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: QQEW , TTWO , MU , NTES

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