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 Health Care AlphaDEX Fund ETF (Symbol: FXH), we found that the implied analyst target price for the ETF based upon its underlying holdings is $67.41 per unit.
With FXH trading at a recent price near $50.73 per unit, that means that analysts see 32.89% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of FXH's underlying holdings with notable upside to their analyst target prices are Hill-Rom Holdings, Inc. (Symbol: HRC), Bio-Rad Laboratories, Inc. (Symbol: BIO), and VWR Corp (Symbol: VWR). Although HRC has traded at a recent price of $44.27/share, the average analyst target is 38.36% higher at $61.25/share. Similarly, BIO has 38.05% upside from the recent share price of $126.40 if the average analyst target price of $174.50/share is reached, and analysts on average are expecting VWR to reach a target price of $30.83/share, which is 35.41% above the recent price of $22.77. Below is a twelve month price history chart comparing the stock performance of HRC, BIO, and VWR:
Below is a summary table of the current analyst target prices discussed above:
Avg. Analyst 12-Mo. Target
% Upside to Target
First Trust Health Care AlphaDEX Fund ETF
Hill-Rom Holdings, Inc.
Bio-Rad Laboratories, 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.