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 Gold Miners ETF (Symbol: GDX), we found that the implied analyst target price for the ETF based upon its underlying holdings is $26.58 per unit.
With GDX trading at a recent price near $19.04 per unit, that means that analysts see 39.58% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of GDX’s underlying holdings with notable upside to their analyst target prices are B2Gold Corp (Symbol: BTG), Sandstorm Gold Ltd (Symbol: SAND), and Osisko Gold Royalties Ltd (Symbol: OR). Although BTG has traded at a recent price of $2.55/share, the average analyst target is 78.90% higher at $4.56/share. Similarly, SAND has 78.10% upside from the recent share price of $3.78 if the average analyst target price of $6.73/share is reached, and analysts on average are expecting OR to reach a target price of $12.33/share, which is 66.90% above the recent price of $7.39. Below is a twelve month price history chart comparing the stock performance of BTG, SAND, and OR:
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|
|Gold Miners ETF||GDX||$19.04||$26.58||39.58%|
|Sandstorm Gold Ltd||SAND||$3.78||$6.73||78.10%|
|Osisko Gold Royalties Ltd||OR||$7.39||$12.33||66.90%|
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 VanEck Vectors Gold Miners ETF (GDX) was trading at $18.73 per share on Monday afternoon, down $0.31 (-1.63%). Year-to-date, GDX has declined -19.41%, versus a 3.28% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of ETF Channel.