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

• The chart shows the Tullow Oil share price since it’s October highs.
• RBC has upgraded Tullow Oil to Outperform, with a target price of 275p.
• Consensus summary: 12 Buys, 5 Holds, 1 Sell; Average target: 174.5p (Source: Bloomberg).
• Current share price 198p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 273p October high?
• Shares -30.1% from 2018 highs; +19.5% from 2018 lows; +10.9% year-to date
• 20 Dec: Tullow receives conditional approval for Uganda oil fields divestment
• 29 Nov: Tullow Oil to reinstate dividend in 2019 After ‘Excellent’ progress
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Tullow Oil – An Example

Let’s say you think that Tullow Oil shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Tullow Oil using a CFD, at the current price of 198p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Tullow Oil share price rises to 273p (+37.9%). Your profit would be £3790 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 10% from the current price. Tullow Oil shares fall 10% and hit your stop-loss. Your loss would be £1000.

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