Broker tips: Aston Martin, Ceres Power

Jefferies upgraded Aston Martin on Wednesday to ‘hold’ from ‘underperform’ and hiked the price target to 300p from 160p.

The bank said: "AML has finally broken a cycle of discounted rights issues and is firmly in M&A territory."

It said the valuation implied by China’s Geely paying 335p per share "is quite generous for a company with much to prove operationally and a long succession of wealthy shareholders".

"However, the deal also provides support and possibly a floor for future transactions, be it another capital raise, a higher stake, or a full takeover."

Last month, Chinese auto group Geely increased its shareholding in AML to 17%, making it the company’s third-largest shareholder.

Geely chairman Eric Li said at the time: "Our decision to increase our shareholding in Aston Martin reflects our confidence in the company’s growth prospects, its technologies and its management team.

"Since first acquiring our minority holding last September, we have worked collaboratively with executive chairman Lawrence Stroll and his colleagues and now look forward to exploring joint technology synergies and new growth opportunities to help this iconic automotive brand to achieve its full potential."

Analysts at Berenberg reiterated their 'buy' recommendation and 1,155p target price for shares of Ceres Power following a technology teach-in with the outfit on its solid oxide electrolyser offering.

The company, which develops fuel cells for power generation and electrolysers for green hydrogen, provided greater detail on its SOEC products, the market opportunity and its strategic and commercial roadmap, they said.

So too, one of Ceres's key partners, Shell, had given further details about its expectations from the demonstration and the overall market.

"We came away more positive about Ceres’s real differentiation in the space, even against its SOEC peers, and that electrolysis offers a significant second leg to the story for which the market current ascribes little-to-no value," the analysts said.

They conceded that the market focus in the short-term would be on its China joint ventures.

Looking past that nonetheless, they anticipated that the business would keep adding new licence partners in order to expand its footprint by regions, increase its manufacturing capacity and thus its high-margin stream of royalty revenues.

"We make no changes to our forecasts or valuation at this stage and retain our Buy rating."