Is it irrelevant, or will the Upgrade make the British American Tobacco share price more attractive?

• Piper Jaffray upgrades BATS to Overweight, with a target of 3000p.
• Consensus: 14 Buys, 6 Holds, 2 Sell; Avg target: 3560p (Source: AlphaTerminal).
• Current share price 2478p (at time of writing).
• Will the shares turn back, or will the upgrade push them towards Dec highs of 2800p?
• Shares -53.5% from 2018 highs; +1.6% from 2018 lows; -0.9% year-to date.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading British American Tobacco – An Example

Let’s say you think that British American Tobacco shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of British American Tobacco using a CFD, at the current price of 2478p. To do this, you need £2,000.

For the purpose of this example, let’s assume the British American Tobacco share price rises to 2800p (+13.0%). Your profit would be £1300 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. British American Tobacco shares 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.