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

• Goldman Sachs upgrades to Buy, with a 320p target.
• Consensus: 3 Buys, 6 Holds, 6 Sell; Avg target: 255p (Source: Bloomberg).
• Current share price 209p (at time of writing).
• Will the shares turn back, or will the upgrade push them to April highs of 265p?
• Shares -32.3% from 2019 highs; +8.8% from 2019 lows; -23.2% year-to date.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Royal Mail – An Example

Let’s say you think that Royal Mail shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Royal Mail using a CFD, at the current price of 209p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Royal Mail share price rises to April highs of 265p (+26%). Your profit would be £2600 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. Royal Mail 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.