Is it irrelevant, or will the Upgrade make the Premier Oil share price more attractive?

• The chart shows the Premier Oil share price since May; a channel/range.
• Today, Arden Partners initiates coverage of Premier Oil at Buy, with a 130p target price
• Consensus summary: 10 Buys, 5 Holds, 0 Sell; Average target: 161p (Source: Bloomberg).
• Current share price 106.5p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards recent highs of 145p?
• Shares -26.9% from 2018 highs; +65.1% from 2018 lows; +39.4% year-to date
• 23 Aug: Davy says Premier Oil investment appeal to increase as debt falls
• The company reports results on Thursday 15 November 
• Source: Dow Jones, Bloomberg, FT, Company News

Click to enlarge

Trading Premier Oil – An Example

Let’s say you think that Premier Oil shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Premier Oil using a CFD, at the current price of 106.5p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Premier Oil share price rises to 145p (+36.1%). Your profit would be £3610 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Premier Oil shares continue their downtrend, they fall 5% and hit your stop-loss. Your loss would be £500.

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