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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 Invesco S&P SmallCap 600— Pure Value ETF (Symbol: RZV), we found that the implied analyst target price for the ETF based upon its underlying holdings is $119.27 per unit.

With RZV trading at a recent price near $104.96 per unit, that means that analysts see 13.63% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of RZV's underlying holdings with notable upside to their analyst target prices are Alpha & Omega Semiconductor Ltd. (Symbol: AOSL), GEO Group Inc (Symbol: GEO), and Methode Electronics Inc (Symbol: MEI). Although AOSL has traded at a recent price of $23.65/share, the average analyst target is 31.08% higher at $31.00/share. Similarly, GEO has 24.89% upside from the recent share price of $11.61 if the average analyst target price of $14.50/share is reached, and analysts on average are expecting MEI to reach a target price of $27.00/share, which is 23.74% above the recent price of $21.82. Below is a twelve month price history chart comparing the stock performance of AOSL, GEO, and MEI:

Below is a summary table of the current analyst target prices discussed above:

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.