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 WisdomTree U.S. Dividend ex-Financials Fund ETF (Symbol: DTN), we found that the implied analyst target price for the ETF based upon its underlying holdings is $108.38 per unit.
With DTN trading at a recent price near $98.25 per unit, that means that analysts see 10.31% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of DTN’s underlying holdings with notable upside to their analyst target prices are Gaming & Leisure Properties, Inc (Symbol: GLPI), STORE Capital Corp (Symbol: STOR), and Interpublic Group of Companies Inc. (Symbol: IPG). Although GLPI has traded at a recent price of $45.47/share, the average analyst target is 18.68% higher at $53.97/share. Similarly, STOR has 14.39% upside from the recent share price of $32.70 if the average analyst target price of $37.41/share is reached, and analysts on average are expecting IPG to reach a target price of $39.50/share, which is 11.20% above the recent price of $35.52. Below is a twelve month price history chart comparing the stock performance of GLPI, STOR, and IPG:
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 |
|---|---|---|---|---|
| WisdomTree U.S. Dividend ex-Financials Fund ETF | DTN | $98.25 | $108.38 | 10.31% |
| Gaming & Leisure Properties, Inc | GLPI | $45.47 | $53.97 | 18.68% |
| STORE Capital Corp | STOR | $32.70 | $37.41 | 14.39% |
| Interpublic Group of Companies Inc. | IPG | $35.52 | $39.50 | 11.20% |
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.
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