Is it irrelevant, or will the Upgrade make the Paddy Power Betfair share price more attractive?

• The chart shows the Paddy Power Betfair share price since December 2017.
• Two brokerages upgraded the company’s shares today.
• Morgan Stanley upgrades Paddy Power Betfair to Equalweight, improving the target price of 6600p (from 6500p).
• UBS upgrades Paddy Power Betfair to Neutral, adjusting the target price of 6950p (from 7130p).
• Consensus summary: 4 Buys, 8 Holds, 7 Sell; Average target: 6821p (Source: Bloomberg).
• Current share price 6910p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 8595p late July highs?
• Shares -29.4% from 2018 highs; +8% from 2018 lows; -28.2% year-to date

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Trading Paddy Power Betfair – An Example

Let’s say you think that Paddy Power Betfair shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Paddy Power Betfair using a CFD, at the current price of 6910p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Paddy Power Betfair share price rises to 8595p (+24.3%). Your profit would be £2430 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 9% from the current price. Paddy Power Betfair shares continue their downtrend, they fall 9% and hit your stop-loss. Your loss would be £900.

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