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

• The chart shows the Tullow Oil share price since September 2016.
• Stifel upgraded Tullow Oil to Buy, increasing the target price to 251p (from 179p).
• Consensus summary: 13 Buys, 7 Holds, 3 Sell; Average target: 279.5p (Source: Bloomberg).
• Current share price 199p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 273p September high?
• Shares -27% from 2018 highs; +20.5% from 2018 lows; -3.9% year-to date
• 17 Sept: Tullow Oil is getting back on the exploration track according to brokers at Canaccord Genuity.
• Recent offshore oil well discovery in Guyana (Hammerhead) could have significant upstream potential for Tullow Oil.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Tullow Oil – An Example

Let’s say you think that Tullow Oil shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Tullow Oil using a CFD, at the current price of 199p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Tullow Oil share price rises to 273p (+37.2%). Your profit would be £3720 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 9% from the current price. Tullow Oil shares fall 9% and hit your stop-loss. Your loss would be £900.

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