Look Under The Hood: SPHQ Has 11% Upside
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. From this, we computed the weighted average implied analyst target price for the ETF itself.
For the Invesco S&P 500 Quality ETF (Symbol: SPHQ), we found that the implied analyst target price based on its underlying holdings is $81.30 per unit. With SPHQ trading recently near $73.49 per unit, this suggests that analysts see a 10.62% upside for this ETF when looking through to the average analyst targets of the underlying holdings.
Three of SPHQ’s underlying holdings with notable upside to their analyst target prices are EOG Resources, Inc. (Symbol: EOG), Trimble Inc. (Symbol: TRMB), and Arch Capital Group Ltd (Symbol: ACGL).
– **EOG Resources, Inc. (EOG)** has a recent trading price of $108.63 per share. The average analyst target price is significantly higher at $140.77 per share, representing a 29.58% upside.
– **Trimble Inc. (TRMB)** is trading near $78.71 per share, with an average analyst target price of $96.89 per share. This implies a 23.09% potential upside.
– **Arch Capital Group Ltd (ACGL)** is currently priced at $89.57 per share, while analysts expect it to reach $108.23 per share, indicating a 20.84% upside.
Below is a summary table of these prices and targets:
| Name | Symbol | Recent Price | Avg. Analyst 12-Mo. Target | % Upside to Target |
|—————————-|——–|————–|—————————-|——————–|
| Invesco S&P 500 Quality ETF| SPHQ | $73.49 | $81.30 | 10.62% |
| EOG Resources, Inc. | EOG | $108.63 | $140.77 | 29.58% |
| Trimble Inc. | TRMB | $78.71 | $96.89 | 23.09% |
| Arch Capital Group Ltd | ACGL | $89.57 | $108.23 | 20.84% |
Are analysts justified in these target prices, or are they being overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have valid justifications for their targets, or are they behind the curve on recent company and industry developments?
A high price target relative to a stock’s current trading price can reflect optimism about the future, but it can also be a precursor to target price downgrades if the targets are relics of outdated assumptions.
These questions require further investor research and due diligence.
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– MPLX Insider Buying
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*The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.*
https://www.nasdaq.com/articles/look-under-hood-sphq-has-11-upside
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