Is it irrelevant, or will the Upgrade make Next’s share price attractive?

• The chart shows Next’s share price movements since the beginning of the year.
• Liberum has upgraded Next to Buy, target price reiterated at 6100p.
• Consensus summary: 7 Buys, 11 Holds, 6 Sell; Average target: 5176p (Source: Bloomberg).
• Current share price 4320p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards falling highs at 5100p ?
• Shares -32.9% from 2018 highs; +5.2% from 2018 lows; -4.7% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Next – An Example

Let’s say you think that Next  shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Next  using a CFD, at the current price of 4320p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Next share price rises to 5200p (+20.3%). Your profit would be £2030 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. Next shares fall 7% and hit your stop-loss. Your loss would be £700.

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