Analysts forecast 14% rise in FXD holdings
LBy examining the underlying holdings of ETFs in our hedge universe on ETF Channel, we compared the trade price of each holding to the 12-month average analyst forward target price, and calculated the weighted average implied target price of analysts. for the ETF itself. For the First Trust Consumer Discretionary AlphaDEX Fund ETF (Ticker: FXD), we found that the implied analyst target price for the ETF based on its underlying holdings is $ 66.50 per unit.
With FXD trading at a recent price close to $ 58.53 per unit, that means analysts are seeing a 13.61% rise for this ETF taking into account analysts’ average targets for the underlying holdings. Three of FXD’s underlying holdings with a notable rise in their analysts’ target prices are Best Buy Inc (ticker: BBY), MGM Resorts International (ticker: MGM) and Ollie’s Bargain Outlet Holdings Inc (ticker: OLLI). Although BBY recently traded at a price of $ 109.50 / share, analysts’ average target is 14.68% higher at $ 125.57 / share. Likewise, MGM is 13.91% higher from the recent share price of $ 41.37 if the average analyst target price of $ 47.12 / share is reached, and analysts expect on average for OLLI to reach a target price of $ 100.73 / share, or 13.75% above the recent price of $ 88.55. Below is a 12-month price history chart comparing the performance of BBY, MGM and OLLI stocks:
Below is a summary table of the analysts’ current target prices discussed above:
|Last name||symbol||Recent price||Avg. 12-Mo analyst. Target||% increase over target|
|First Trust AlphaDEX Consumer Discretionary Fund ETF||FXD||$ 58.53||$ 66.50||13.61%|
|Best buy inc||BBY||$ 109.50||$ 125.57||14.68%|
|MGM Resorts International||MGM||$ 41.37||$ 47.12||13.91%|
|Ollie’s Bargain Outlet Holdings Inc||OLLI||$ 88.55||$ 100.73||13.75%|
Are analysts justified in these goals, or overly optimistic about where these stocks will trade in 12 months? Do analysts have a valid rationale for their goals or are they lagging behind recent business and industry developments? A high price target relative to a stock’s price may reflect optimism about the future, but can also be a harbinger of price declines if the targets were a relic of the past. These are questions that require further research from investors.
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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.