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

• The chart shows the Babcock share price since November.
• Peel Hunt upgraded to Add, with a price target of 578p.
• Consensus summary: 9 Buys, 3 Holds, 2 Sell; Average target: 742p (Source: Bloomberg).
• Current share price 560p (at time of writing).
• Shares currently trade -1.1% from 2019 highs; +18.1% from 2019 lows; +14.5% year-to date
• 18 Jan: Shore Capital says Babcock operates in a market with significant growth opportunities
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Babcock – An Example

Let’s say you think that Babcock shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Babcock using a CFD, at the current price of 560p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Babcock share price rises to 601p late Nov highs (+7.3%). Your profit would be £730 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Babcock shares fall 3% and hit your stop-loss. Your loss would be £300

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