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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 iShares North American Tech-Software ETF, we found that the implied analyst target price for the ETF based upon its underlying holdings is $199.70 per unit.
With IGV trading at a recent price near $181.92 per unit, that means that analysts see 9.77% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of IGV’s underlying holdings with notable upside to their analyst target prices are Pegasystems, 8×8, and FireEye. Although PEGA has traded at a recent price of $54.55/share, the average analyst target is 34.43% higher at $73.33/share. Similarly, EGHT has 25.00% upside from the recent share price of $18.80 if the average analyst target price of $23.50/share is reached, and analysts on average are expecting FEYE to reach a target price of $19.33/share, which is 22.36% above the recent price of $15.80. Below is a twelve month price history chart comparing the stock performance of PEGA, EGHT, and FEYE:
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 |
|---|---|---|---|---|
| iShares North American Tech-Software ETF | IGV | $181.92 | $199.70 | 9.77% |
| Pegasystems Inc | PEGA | $54.55 | $73.33 | 34.43% |
| 8×8 Inc | EGHT | $18.80 | $23.50 | 25.00% |
| FireEye Inc | FEYE | $15.80 | $19.33 | 22.36% |
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.
Click here to find out 10 ETFs With Most Upside To Analyst Targets »