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

• The chart shows the RSA Insurance share price since the late October.
• Jefferies upgrades RSA Insurance to Buy, upping the target price to 606p.
• Consensus summary: 13 Buys, 7 Holds, 0 Sell; Average target: 643.17p (Source: Bloomberg).
• Current share price 507p (at time of writing).
• Shares -26% from 2018 highs; now trading at 2018 lows; -19.8% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading RSA Insurance – An Example

Let’s say you think that RSA Insurance shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of RSA Insurance using a CFD, at the current price of 507p. To do this, you need £2,000.

For the purpose of this example, let’s assume the RSA Insurance share price rises to 555p recent highs(+9.4%). Your profit would be £940 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. RSA Insurance 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.