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

• The chart shows the Sainsbury share price since late March.
• AlphaValue upgrades Sainsbury to Buy, setting the target price at 331p.
• Consensus summary: 8 Buys, 7 Holds, 4 Sell; Average target: 327.23p (Source: Bloomberg).
• Current share price 266.35p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 320p November highs?
• Shares -22.67% from 2018 highs; +17.6% from 2018 lows; +10.4% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Sainsbury – An Example

Let’s say you think that Sainsbury shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Sainsbury using a CFD, at the current price of 266.35p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Sainsbury share price rises to 320p (+20.1%). Your profit would be £2010 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Sainsbury shares continue their downtrend, they fall 8% and hit your stop-loss. Your loss would be £800.

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