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 MSCI USA Quality Factor ETF (QUAL), we found that the implied analyst target price for the QUAL stock based upon its underlying holdings is $71.07 per unit.
With QUAL stock trading at a recent price near $61.05 per unit, that means that analysts see 16.42% upside for this ETF looking through to the average analyst targets of the underlying holdings.
Although JLL has traded at a recent price of $118.72 per share, the average analyst target is 61.51% higher at $191.75 per share. Similarly, RJF has 58.27% upside from the recent share price of $41.70 per share if the average analyst target price of $66.00 per share is reached, and analysts on average are expecting AMG to reach a target price of $190.40 per share, which is 55.56% above the recent price of $122.40 per share.
Below is a twelve month price history chart comparing the stock performance of JLL, RJF, and AMG:
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 MSCI USA Quality Factor ETF||QUAL||$61.05||$71.07||16.42%|
|Jones Lang LaSalle Inc||JLL||$118.72||$191.75||61.51%|
|Raymond James Financial, Inc.||RJF||$41.70||$66.00||58.27%|
|Affiliated Managers Group Inc.||AMG||$122.40||$190.40||55.56%|
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.
The average analyst target price data upon which this article was based, is courtesy of data provided by Zacks Investment Research via Quandl.com.
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