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

• JP Morgan upgrades to Overweight with a target price of 1050p.
• Consensus: 2 Buys, 8 Holds, 11 Sell; Avg target: 804p (Source: Bloomberg).
• Current share price 833p (at time of writing).
• Will the shares turn back, or will the upgrade push them towards 1029p 2019 highs?
• Shares -19.1% from 2019 highs; +3.4% from 2019 lows; -11.2% year-to date.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Pearson – An Example

Let’s say you think that Pearson shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Pearson using a CFD, at the current price of 833p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Pearson share price rises to 1029p 2019 highs (+23.5%). Your profit would be £2350 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. Pearson 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.