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

• The chart shows the BAE Systems share price since March 2016.
• Credit Suisse upgrades BAE Systems to Outperform, raising the target price to 640p (from 630p)
• Consensus summary: 18 Buys, 3 Holds, 2 Sell; Average target: 684p (Source: Bloomberg).
• Current share price 540p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards July high of 680p?
• Shares -22.8% from 2018 highs; +3.7% from 2018 lows; -5.8% year-to date

Click to enlarge

Trading BAE Systems – An Example

Let’s say you think that BAE Systems shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of BAE Systems using a CFD, at the current price of 550p. To do this, you need £2,000.

For the purpose of this example, let’s assume the BAE Systems share price rises to 680p (+26%). Your profit would be £2,600 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 10% from the current price. BAE Systems shares continue their downtrend, they fall 10% and hit your stop-loss. Your loss would be £1,000.

This is provided for information purposes only. It should not be taken as a recommendation.