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

• The chart shows the SSE share price since late May.
• Societe Generale initiated coverage of SSE at Buy, setting the target price at 1300p.
• Consensus summary: 11 Buys, 5 Holds, 0 Sell; Average target: 1366p (Source: Bloomberg).
• Current share price 1142p (at time of writing).
• 10 Oct: UK’s competition authority approved the merger of SSE and Npower.
• The merger should strengthen SSE’s competitive position.
• Shares -20.6% from 2018 highs; +6.8% from 2018 lows; -13.4% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading SSE – An Example

Let’s say you think that SSE shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of SSE using a CFD, at the current price of 1142p. To do this, you need £2,000.

For the purpose of this example, let’s assume the SSE share price rises to 1286p September high (+12.6%). Your profit would be £1260 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. SSE shares continue their downtrend, they fall 7% and hit your stop-loss. Your loss would be £700.

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