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

• The chart shows the Cobham share price since July 2017.
• Berenberg upgrades Cobham to Buy, setting the target price at 124p.
• Consensus summary: 8 Buys, 6 Holds, 5 Sell; Average target: 124.15p (Source: Bloomberg).
• Current share price 103.3p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards Summer highs of 133p?
• Shares -26.5% from 2018 highs; +3.4% from 2018 lows; -18.3% year-to date.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal, CMC Markets

Click to enlarge

Trading Cobham – An Example

Let’s say you think that Cobham shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Cobham using a CFD, at the current price of 103.3p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Cobham share price rises to 133p (+28.7%). Your profit would be £2870 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. Cobham shares continue their downtrend, they 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.