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

• The chart shows the Persimmon share price activity since late October.
• Bank of America upgrades to Buy, with a target price of 2400p, 9% above current levels.
• Consensus summary: 9 Buys, 7 Holds, 2 Sell; Average target: 24057p (Source: Bloomberg).
• Current share price 2206p (at time of writing).
• Shares -27.5% from 2018 highs; +15.6% from 2019 lows; +14.1% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Persimmon – An Example

Let’s say you think that Persimmon shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Persimmon  using a CFD, at the current price of 2206p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Persimmon share price rises to 2451p Nov highs (+11.1%). Your profit would be £1110 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Persimmon shares break lower, they fall 5% and hit your stop-loss. Your loss would be £500.

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