Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we compared each holding’s trading price against the average analyst 12-month forward target price, and calculated the weighted 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 on its underlying holdings is $201.38 per unit.
With XLY trading at a recent price near $180.99 per unit, that means analysts see an 11.26% upside for this ETF looking at the average analysts of the underlying holdings. Three of XLY’s underlying holdings with notable upsides to their analyst target prices are Aptiv PLC (Symbol: APTV ), Caesars Entertainment Inc (Symbol: CZR ), and Carnival Corp (Symbol: CCL ). Although APTV traded at a recent price of $79.72/share, the average analyst target is 38.87% higher at $110.70/share. Similarly, CZR has 38.83% upside from the recent share price of $41.61 if the average analyst target price of $57.77/share is reached, and analysts on average expect CCL to reach a target price of $21.44/share, which is 28.77% above the. recent price of $16.65. Below is a twelve month price history chart comparing the stock performance of APTV, CZR, and CCL:
Below is a summary table of the current analyst target prices discussed above:
name | Symbol | Recent Price | Avg. Analyst 12-Mo. Purpose | % Up to Target |
---|---|---|---|---|
The Consumer Discretionary Select Sector SPDR Fund ETF | XLY | $180.99 | $201.38 | 11.26% |
Aptiv PLC | APTV | $79.72 | $110.70 | 38.87% |
Caesars Entertainment Inc | CZR | $41.61 | $57.77 | 38.83% |
Carnival Corp | CCL | $16.65 | $21.44 | 28.77% |
Are analysts justified in these targets, or overly optimistic about where these stocks will trade 12 months from now? Do the analysts have a valid justification for their goals, 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 a target price decrease if the targets were a relic of the past. These are questions that require further investment research.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.