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

• The chart shows the Ferguson share price since July 2017.
• Morningstar upgrades Ferguson to Hold.
• Consensus summary: 12 Buys, 14 Holds, 0 Sell; Average target: 6269.6p.
• Current share price 4992p (at time of writing).
• Shares -24.7% from 2018 highs; +1% from 2018 lows; -6.3% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires

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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 4992p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Ferguson share price rises to 6602p September high (+32.2%). Your profit would be £3220 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. Ferguson shares continue their downtrend, they fall 10% and hit your stop-loss. Your loss would be £1000.

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