Is it irrelevant, or will the Upgrade make the Royal Bank of Scotland share price more attractive?

• The chart shows the RBS share price since Nov 2016.
• Morningstar upgrades RBS to Buy, setting the target price at 290p (from 265p).
• Consensus summary: 18 Buys, 7 Holds, 0 Sell; Average target: 306.44p.
• Current share price 216p (at time of writing).
• Shares -18.7% from 2018 highs; +1.45% from 2018 lows; -22.1% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Royal Bank of Scotland – An Example

Let’s say you think that Royal Bank of Scotland shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Royal Bank of Scotland using a CFD, at the current price of 216p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Royal Bank of Scotland share price rises to 254p Nov high (+17.6%). Your profit would be £1760 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. Royal Bank of Scotland 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.