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

• Morningstar upgrades to Buy, with a target of 273p
• Alpha Value upgrades to Buy, with a target of 266p
• Consensus summary: 5 Buys, 9 Holds, 6 Sell; Average target: 260p (Source: AlphaTerminal).
• Current share price 219p (at time of writing).
• Shares -25.9% from 2019 highs; +3.5% from 2019 lows; -17.2% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Sainsbury’s – An Example

Let’s say you think that Sainsbury’s shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Sainsbury’s using a CFD, at the current price of 219p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Sainsbury’s share price rises to recent highs of 240p (+9.5%). Your profit would be £950 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. Sainsbury’s 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.