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 Consumer Discretionary Select Sector SPDR Fund ETF (Symbol: XLY), we found that the implied analyst target price for the ETF based upon its underlying holdings is $98.06 per unit.
With XLY trading at a recent price near $89.13 per unit, that means that analysts see 10.02% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of XLY's underlying holdings with notable upside to their analyst target prices are (Symbol: DISCK), AutoNation, Inc. (Symbol: AN), and Twenty-First Century Fox Inc (Symbol: FOXA). Although DISCK has traded at a recent price of $25.39/share, the average analyst target is 18.16% higher at $30.00/share. Similarly, AN has 18.05% upside from the recent share price of $40.98 if the average analyst target price of $48.38/share is reached, and analysts on average are expecting FOXA to reach a target price of $32.58/share, which is 18.01% above the recent price of $27.61. Below is a twelve month price history chart comparing the stock performance of DISCK, AN, and FOXA:
Below is a summary table of the current analyst target prices discussed above:
Avg. Analyst 12-Mo. Target
% Upside to Target
Consumer Discretionary Select Sector SPDR Fund ETF
Twenty-First Century Fox 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.