Is it irrelevant, or will the Upgrade make the Royal Bank of Scotland share price more attractive?

• The chart shows the Royal Bank of Scotland share price since the beginning of 2018.
• UBS upgrades Royal Bank of Scotland to Buy, leaving the target price unchanged at 300p.
• Consensus summary: 16 Buys, 9 Holds, 0 Sell; Average target: 305p (Source: Bloomberg).
• Current share price 231p (at time of writing).
• September UK mortgage lending figures beat expectations, with £3.89bn (65.2K mortgages) taken, beating consensus of £3bn (64.75K).
• UK Index ‘s Banking sector is benefiting from the strong mortgage market in spite of Brexit uncertainty.
• Shares -26% from 2018 highs; +1.9% from 2018 lows; -16.7% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Royal Bank of Scotland – An Example

Let’s say you think that Royal Bank of Scotland shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Royal Bank of Scotland using a CFD, at the current price of 231p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Royal Bank of Scotland share price rises to 304p 2018 high (+31.6%). Your profit would be £3160 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 10% from the current price. Royal Bank of Scotland shares continue their downtrend, they fall 10% and hit your stop-loss. Your loss would be £1000.

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