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 Top 50 ETF (Symbol: XLG), we found that the implied analyst target price for the ETF based upon its underlying holdings is $164.10 per unit.
With XLG trading at a recent price near $146.95 per unit, that means that analysts see 11.67% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of XLG's underlying holdings with notable upside to their analyst target prices are Merck & Co., Inc (Symbol: MRK), Pfizer Inc (Symbol: PFE), and Intel Corp (Symbol: INTC). Although MRK has traded at a recent price of $56.11/share, the average analyst target is 12.13% higher at $62.92/share. Similarly, PFE has 12.04% upside from the recent share price of $34.74 if the average analyst target price of $38.92/share is reached, and analysts on average are expecting INTC to reach a target price of $35.93/share, which is 11.69% above the recent price of $32.17. Below is a twelve month price history chart comparing the stock performance of MRK, PFE, and INTC:
Combined, MRK, PFE, and INTC represent 5.83% of the Guggenheim S&P 500 Top 50 ETF. Below is a summary table of the current analyst target prices discussed above:
Avg. Analyst 12-Mo. Target
% Upside to Target
Guggenheim S&P 500 Top 50 ETF
Merck & Co., Inc
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.