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

• The chart shows the Drax share price since late May.
• AlphaValue upgrades Drax to Buy, target price at 432p.
• Consensus summary: 7 Buys, 4 Holds, 0 Sell; Average target: 422p.
• Current share price 3559p (at time of writing).
• Shares -19.5% from 2018 highs; +59.6% from 2018 lows; -31.3% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Drax – An Example

Let’s say you think that Drax shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Drax using a CFD, at the current price of 355p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Drax share price rises to 433p Oct/Nov highs (+22.0%). Your profit would be £2200 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. Drax 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.