ILooking at the underlying ETF holdings in our coverage universe on ETF Channel, we compared the trading price of each holding to the 12-month futures analyst average target price, and calculated the weighted average implied analyst target price. for the ETF itself. For the Invesco S&P SmallCap High Dividend Low Volatility ETF (Symbol: XSHD), we found that the analysts’ implied target price for the ETF based on its underlying holdings is $24.96 per share.
With XSHD trading at a recent price close to $22.34 per share, this means analysts see an 11.72% upside potential for this ETF when looking at the average analyst targets of the underlying holdings. Three of XSHD’s underlying holdings with a notable advantage over their analyst target prices are Industrial Logistics Properties Trust (ticker: ILPT), Progress Software Corp (ticker: PRGS) and Pennymac Mortgage Investment Trust (ticker: PMT) . Although the ILPT traded at a recent price of $22.67/share, the average analyst target is 19.98% higher at $27.20/share. Similarly, PRGS is up 18.92% from the recent price of $47.09 if the average analyst target price of $56.00/share is reached, and analysts on average expect PMT hits a target price of $19.42/share, 14.96% above the recent price of $16.89. Below is a 12 month price history chart comparing the stock performance of ILPT, PRGS and PMT:
Together, ILPT, PRGS and PMT represent 5.75% of the Invesco S&P SmallCap High Dividend Low Volatility ETF. Below is a table summarizing the current target prices of the analysts mentioned above:
|name||symbol||Recent Price||Avg. 12-MB Analyst. Target||% increase over target|
|Invesco S&P SmallCap High Dividend Low Volatility ETF||XSHD||$22.34||$24.96||11.72%|
|Industrial Logistics Property Trust||ILPT||$22.67||$27.20||19.98%|
|Progress Software Corp.||PRGS||$47.09||$56.00||18.92%|
|Pennymac Mortgage Investment Trust||EMP||$16.89||$19.42||14.96%|
Are analysts justified in these targets, or too optimistic about where these stocks will trade in 12 months? Do the analysts have a valid rationale for their goals, or are they lagging behind recent company and industry developments? A high price target relative to a stock’s price can reflect optimism about the future, but can also be a precursor to target price declines if targets were a relic of the past. These are questions that require further research from investors.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.