Is it irrelevant, or will the Upgrade make the Smith & Nephew share price more attractive?

• The chart shows the Smith & Nephew share price since the late October.
• Twin broker upgrade today.
• Morgan Stanley upgrades Smith & Nephew to Overweight, setting the target price at 1692p.
• Deutsche Bank upgrades Smith & Nephew to Hold, setting the target price at 1350p.
• Consensus summary: 6 Buys, 10 Holds, 1 Sell; Average target: 1469p (Source: Bloomberg).
• Current share price 1485p (at time of writing).
• Hit new record highs today.
• Shares -4% from 2018 highs; -26.5% off 2018 lows; +15.5% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Smith & Nephew – An Example

Let’s say you think that Smith & Nephew shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Smith & Nephew using a CFD, at the current price of 1485p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Smith & Nephew share price rises to 1600p new record highs(+7.7%). 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 3% from the current price. Smith & Nephew 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.