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

• The chart shows the Ferguson share price since July 2017.
• Numis upgrades Ferguson to Buy, target price at 6150p.
• Consensus summary: 14 Buys, 12 Holds, 0 Sell; Average target: 6124.97p.
• Current share price 4989p (at time of writing).
• Shares -24.33% from 2018 highs; +6.54% from 2018 lows; -6.3% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Ferguson – An Example

Let’s say you think that Ferguson shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Ferguson using a CFD, at the current price of 4989p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Ferguson share price rises to 6602p September high (+32.3%). Your profit would be £3230 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. Ferguson shares continue their downtrend, they 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.