Broker tips: Codemasters, Invinity

Analysts at Berenberg lowered their rating on video games developer Codemasters from 'buy' to 'hold' on Wednesday as a result of Take-Two Interactive's impending takeover.

Berenberg stated that Codemasters reported "strong" first-half results on Monday but, with the takeover by Take-Two Interactive progressing and shares currently trading at a premium to the US firm's implied offer, it felt it prudent to downgrade its rating.

"We think the likelihood of a counteroffer is diminishing," said the analysts, who did also note that they do not believe that the takeover process will be "completely straightforward".

The German bank stated that the frustration it had encountered among shareholders meant there was "still a possibility" that Take-Two may have to raise its offer. However, Berenberg highlighted that this was a scenario on which it had only "limited visibility".

"While there may be more developments in the course of the takeover process, we choose to move to the sidelines."

Analysts at Canaccord Genuity raised their target price on battery manufacturing company Invinity Energy Systems from 200.0p to 260.0p on Wednesday on the back of the group's recently awarded contract in South Australia.

On Tuesday, Invinity announced the award of a £6.7m contract to supply an eight megawatt-hour flow battery system to a solar photovoltaic power plant project, run by Yadlamalka Energy, set to be installed in the second half of 2021.

Canaccord highlighted that the contract roughly doubled Invinity's existing confirmed backlog, and meant that the company now had around 17mwh of contractual backlog to be executed in 2021.

In addition to that, Canaccord noted that there was approximately a further 7.0mwh for 2021 delivery expected to be awarded in the next few weeks, which means its projection of sales of 22-25mwh for 2021 was "almost fully derisked".

The Canadian bank also reiterated its 'speculative buy' rating on the stock.