Does this present an opportunity for you?

Is it irrelevant, or will the Downgrade make Sophos share price attractive?

• The chart shows Sophos’ share price movements over the past month
• Deutsche Bank has downgraded Sophos to a Hold rating, with a target price at 530p
• Summary of current ratings:
  • 9 Buys
  • 2 Holds
  • 0 Sells
• Average target price is at 644.33p (Source: Bloomberg)
• Current share price is 485.4p (at time of writing)
• 3 month lows at 432p. 3 month highs at 645.25p.
• Will it bounce back, or will the downgrade push the shares back towards 471p August lows?

Click to enlarge

Trading Sophos – An Example

Let’s say you think that Sophos shares have bottomed out as result of this downgrade. You decide to buy exposure to £10,000 worth of Sophos using a CFD, at the current price of 485p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Sophos share price rises by 10%. Your profit would be £1,000, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Sophos’ shares continue falling as a result of the downgrade, they falls 5% and hit your stop-loss. Your loss would be £500.

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