PSC ETF Analysts See 16.38% Upside to Target Price

The Principal US Small-Cap ETF (PSC) has an implied analyst target price of $62.39 per unit, based on the average analyst 12-month forward target price of its underlying holdings. With PSC trading at $53.61 per unit, analysts see 16.38% upside for this ETF. The ETF's underlying holdings with notable upside to their analyst target prices are Accel Entertainment Inc (ACEL), OppFi Inc (OPFI), and Paysafe Ltd (PSFE).

Small-cap stocks have historically underperformed their large-cap counterparts, but recent market dynamics and analyst targets suggest potential opportunities for investors. This article explores two key small-cap ETFs, the Vanguard Russell 2000 ETF and the Principal US Small-Cap ETF (PSC), to provide insights into their current performance and future prospects.

Vanguard Russell 2000 ETF (VTWO)

The Vanguard Russell 2000 ETF, which tracks the Russell 2000 index, has delivered a 106% total return over the past decade, compared to 257% for the Vanguard S&P 500 ETF (VOO) [1]. Despite this underperformance, small-cap stocks are poised to benefit from potential downward interest rates and valuation gaps between small-cap and large-cap stocks. The ETF's low expense ratio of 0.07% makes it an attractive option for investors seeking cost-effective exposure to small-cap stocks.

However, leveraged ETFs, such as the Direxion Daily Small Cap Bull 3X Shares ETF (TNA), are generally not suitable for long-term investments. These ETFs aim to deliver triple the daily returns of the Russell 2000 but can result in significant losses over extended periods due to the mathematics of daily leveraged returns [1].

Principal US Small-Cap ETF (PSC)

The Principal US Small-Cap ETF (PSC) has an implied analyst target price of $62.39 per unit, based on the average analyst 12-month forward target price of its underlying holdings. With PSC trading at $53.61 per unit, analysts see 16.38% upside for this ETF [3]. The ETF's underlying holdings, such as Accel Entertainment Inc (ACEL), OppFi Inc (OPFI), and Paysafe Ltd (PSFE), have notable upside to their analyst target prices.

Analysts' optimism about the future performance of these stocks can reflect their potential for growth and increased profitability. However, it is essential to conduct further research to assess the validity of these targets and their alignment with recent company and industry developments.

Conclusion

Small-cap ETFs present both opportunities and risks for investors. The Vanguard Russell 2000 ETF offers a cost-effective way to gain exposure to small-cap stocks, while the Principal US Small-Cap ETF (PSC) presents an attractive investment opportunity with notable upside potential based on analyst targets. However, investors should exercise caution when considering leveraged ETFs and thoroughly research the underlying holdings of ETFs before making investment decisions.

References

[1] https://www.nasdaq.com/articles/1-small-cap-etf-buy-hand-over-fist-and-1-avoid
[2] https://www.nasdaq.com/articles/implied-fnda-analyst-target-price-33
[3] https://economictimes.indiatimes.com/markets/stocks/news/consolidation-an-opportunity-or-threat-depends-on-5-mid-cap-stocks-from-different-sectors-with-upside-potential-of-over-26/articleshow/122495113.cms