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

• The chart shows the Tesco share price since late 2015
• Exane BNP Paribas upgrades to Neutral (from Underperform); price target upped to 210p
• Consensus summary: 14 Buys, 6 Holds, 1 Sell; Average target: 260.94p (Source: Bloomberg).
• Current share price 203p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 266p August highs?
• Shares -23.9% from 2018 highs; +5.8% from 2018 lows; -3% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Tesco – An Example

Let’s say you think that Tesco shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Tesco using a CFD, at the current price of 203p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Tesco share price rises to 266p (+31%). Your profit would be £3100 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Tesco shares fall 8% and hit your stop-loss. Your loss would be £800.

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