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

• Morgan Stanley upgrades to Equalweight with a 270p target.
• Consensus: 2 Buys, 7 Holds, 8 Sell; Avg target: 278p (Source: Bloomberg).
• Current share price 274p (at time of writing).
• Will the shares turn back, or will the upgrade push them to Jan highs of 308p?
• Shares -10.6% from 2019 highs; +11.8% from 2019 lows; +0.9% year-to date.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Royal Mail – An Example

Let’s say you think that Royal Mail shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Royal Mail using a CFD, at the current price of 274p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Royal Mail share price rises to Jan highs of 308p (+12.4%). Your profit would be £1240 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 4% from the current price. Royal Mail shares fall 4% and hit your stop-loss. Your loss would be £400.

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