Does this Upgrade present an opportunity for you?

Is it irrelevant, or will the Upgrade make the Rolls-Royce share price more attractive?

• The chart shows the Rolls-Royce share price since February.
• Oddo BHF upgrades Rolls-Royce to Buy, improving the target price at 1120p (from 1050p).
• Consensus summary: 8 Buys, 9 Holds, 5 Sell; Average target: 1006p (Source: Bloomberg).
• Current share price 855p (at time of writing).
• According to analysts at Moody’s (13 Sept), aerospace companies such as Airbus and Rolls-Royce should see margin expansion this year and 7-9% profit growth.
• Will the shares turn back, or will the upgrade push the shares back towards 1105p late July highs?
• Shares -24% from 2018 highs; +5% from 2018 lows; +1.1% year-to date

Click to enlarge

Trading Rolls-Royce – An Example

Let’s say you think that Rolls-Royce shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Rolls-Royce using a CFD, at the current price of 855p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Rolls-Royce share price rises to 1105p (+29.2%). Your profit would be £2920 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. Rolls-Royce shares continue their downtrend, they fall 7% and hit your stop-loss. Your loss would be £700.

This is provided for information purposes only. It should not be taken as a recommendation.