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

• Peel Hunt upgrades to Add with a target price of 5430p.
• Consensus: 14 Buys, 7 Holds, 4 Sell; Avg target: 5643p (Source: Bloomberg).
• Current share price 5069p (at time of writing).
• Will the shares turn back, or will they rally back to recent 5478p highs?
• Shares -9.5% from 2019 highs; +10.3% from 2019 lows; +1% year-to date.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Ferguson – An Example

Let’s say you think that Ferguson shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Ferguson using a CFD, at the current price of 5069p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Ferguson share price rises to recent highs at 5478p (+8%). Your profit would be £800 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. Ferguson 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.