Sum Up The Pieces: XES Could Be Worth $19
Thu, Oct 5, 8:34 AM ET, by ETF Channel
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 SPDR S&P Oil & Gas Equipment & Services ETF (XES), we found that the implied analyst target price for the ETF based upon its underlying holdings is $18.78 per unit.
With XES trading at a recent price near $16.31 per unit, that means that analysts see 15.17% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of XES's underlying holdings with notable upside to their analyst target prices are Basic Energy Services Inc (BAS), US Silica Holdings, Inc. (SLCA), and C&J Energy Services Inc (CJ). Although BAS has traded at a recent price of $19.56/share, the average analyst target is 52.86% higher at $29.90/share. Similarly, SLCA has 44.06% upside from the recent share price of $31.16 if the average analyst target price of $44.89/share is reached, and analysts on average are expecting CJ to reach a target price of $39.47/share, which is 33.04% above the recent price of $29.67. Below is a twelve month price history chart comparing the stock performance of BAS, SLCA, and CJ:
Combined, BAS, SLCA, and CJ represent 8.55% of the SPDR S&P Oil & Gas Equipment & Services 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|
|SPDR S&P Oil & Gas Equipment & Services ETF ||XES ||$16.31 ||$18.78 ||15.17%|
|Basic Energy Services Inc ||BAS ||$19.56 ||$29.90 ||52.86%|
|US Silica Holdings, Inc. ||SLCA ||$31.16 ||$44.89 ||44.06%|
|C&J Energy Services Inc ||CJ ||$29.67 ||$39.47 ||33.04%|
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.
The average analyst target price data upon which this article was based, is courtesy of data provided by Zacks Investment Research via Quandl.com.
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Read the original article at ETF Channel: Sum Up The Pieces: XES Could Be Worth $19
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