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

• JP Morgan upgrades to Overweight with a target price of 5950p.
• Consensus: 14 Buys, 8 Holds, 2 Sell; Avg target: 5822p (Source: Bloomberg).
• Current share price 4837p (at time of writing).
• Will the shares turn back, or will they rally back to recent 5388p highs?
• Shares -11.9% from 2019 highs; +5.4% from 2019 lows; -3.5% year-to date.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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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 4837p. 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 5388p (+11.4%). Your profit would be £1140 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. Ferguson shares 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.