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

• RBC upgraded to Outperform yesterday (29 May), target 150p.
• Exane BNP upgrades to Outperform today (30 May), target 160p.
• Consensus: 9 Buys, 4 Holds, 0 Sell; Avg target: 146p (Source: Bloomberg).
• Current share price 134p (at time of writing).
• Will the shares turn back, or will the upgrade push them towards Jan/Feb 149p highs?
• Shares -2.5% from 2019 highs; +41.2% from 2019 lows; +41.1% year-to date.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Serco – An Example

Let’s say you think that Serco shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Serco using a CFD, at the current price of 134p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Serco share price rises to 149p highs (+11.1%). Your profit would be £1110 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Serco shares fall 3% and hit your stop-loss. Your loss would be £300.

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