Is it irrelevant, or will the Upgrade make the Royal Mail share price more attractive?

• The chart shows the Royal Mail share price since early October.
• RBC Capital Markets upgrades Royal Mail to Sector Perform.
• Consensus summary: 1 Buys, 8 Holds, 8 Sell; Average target: 331.38p (Source: Bloomberg).
• Current share price 322p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 371p recent highs?
• Shares -50% from 2018 highs; +6.7% from 2018 lows; -28.4% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Royal Mail – An Example

Let’s say you think that Royal Mail shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Royal Mail using a CFD, at the current price of 322p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Royal Mail share price rises to 371p (+15.2%). Your profit would be £1520 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 6% from the current price. Royal Mail shares continue their downtrend, they fall 6% and hit your stop-loss. Your loss would be £600.

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