Analysts See 16% Upside For The Holdings of FPX

Analysts See 16% Upside For The Holdings of FPX, BNK Invest

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 First Trust US Equity Opportunities ETF (Symbol: FPX), we found that the implied analyst target price for the ETF based upon its underlying holdings is $79.59 per unit.
With FPX trading at a recent price near $68.33 per unit, that means that analysts see 16.48% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of FPX’s underlying holdings with notable upside to their analyst target prices are Takeda Pharmaceutical Co Ltd (Symbol: TAK), Fiat Chrysler Automobiles NV (Symbol: FCAU), and SmartSheet Inc (Symbol: SMAR). Although TAK has traded at a recent price of $19.78/share, the average analyst target is 42.57% higher at $28.20/share. Similarly, FCAU has 33.09% upside from the recent share price of $16.78 if the average analyst target price of $22.33/share is reached, and analysts on average are expecting SMAR to reach a target price of $35.33/share, which is 23.59% above the recent price of $28.59. Below is a twelve month price history chart comparing the stock performance of TAK, FCAU, and SMAR:

TAK, FCAU, and SMAR Relative Performance Chart
Combined, TAK, FCAU, and SMAR represent 8.00% of the First Trust US Equity Opportunities ETF. 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
First Trust US Equity Opportunities ETF FPX $68.33 $79.59 16.48%
Takeda Pharmaceutical Co Ltd TAK $19.78 $28.20 42.57%
Fiat Chrysler Automobiles NV FCAU $16.78 $22.33 33.09%
SmartSheet Inc SMAR $28.59 $35.33 23.59%

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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