The SPDR S&P 500 ETF Trust (SPY) is among the top ETFs (Exchange Traded Funds). But before investing in SPY, it’s essential to satisfy the fundamental question of what it will be worth at some point in the future. Investors could leverage TipRanks’ exclusive ETF Forecast & Price Target tool to find the answers. According to the recommendations of 6,186 analysts, the 12-month average SPDR S&P 500 ETF Trust price target of $466.91 implies 17.79% upside potential.
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Learn more about TipRanks’ forecasts and price targets for individual ETFs.
While SPY has decent upside potential, TipRanks’ data shows that this ETF has a Moderate Buy consensus rating on TipRanks. Among the 6,186 analysts providing ratings on 505 holdings of SPY, 56.76% have given a Buy rating, 37.08% have assigned a Hold rating, and 6.16% have given a Sell rating.
How Does TipRanks Determine Analyst Ratings on ETFs?
TipRanks uses its proprietary technology to calculate the analyst forecast and price targets for ETFs, based on a combination of the individual performances of the underlying assets. At a glance, you will see the overall analyst rating, analyst price target, and upside or downside on an ETF.
Innovatively, we calculate a weighted average number based on the combination of all the ETF’s holdings. For instance, the average price forecast for an ETF is calculated by multiplying each individual holding’s price targets by its weight (allocation) in the ETF.
Is SPY a Good ETF?
The SPDR S&P 500 ETF Trust tracks the S&P 500 Index (SPX) and aims to offer returns similar to the benchmark index. The ETF is highly diversified across 24 separate industry groups and focuses on large-cap stocks, thus reducing the investors’ overall risk.
SPY has delivered an average annualized return of 12.54% in the past decade. Moreover, it has a low expense ratio of 0.09%, which is attractive. Also, the ETF has a forward Price/Earnings (P/E) multiple of 18.31, which is well within investors’ reach and in line with the benchmark index.
Here is a summary of the top 10 holdings of SPY, built with the help of the TipRanks’ Stock Comparison tool.
SPY’s top 10 stocks account for about 25.6% of its total holdings. Our data shows that seven out of the top 10 holdings of SPY have an Outperform Smart Score on TipRanks. Furthermore, all these stocks have a Buy consensus rating (Strong or Moderate Buy).
Bottom Line
The SPDR S&P 500 ETF Trust appears to be a smart investment to diversify risk and bet on top large-cap companies listed on the exchange. Further, our unique ETF Forecast & Price Target tool shows that the SPY ETF could offer a decent upside potential over the next 12 months.
