Berenberg raises target price on Codemasters

Analysts at Berenberg raised their target price on video games developer Codemasters from 340.0p to 400.0p on Wednesday, stating the group had added "an extra gear" as a result of a new multi-year licence deal.

Berenberg highlighted Codemasters newly signed multi-year licence deal with the FIA World Rally Championship as why it views it as a "solid, but underappreciated" video games company.

The German bank stated the agreement added a further licensed franchise to Codemasters' "rapidly expanding" content pool, supported its medium-term earnings growth and poised the company for a valuation rerating.

"In our view, Codemasters' increasing revenue diversification, potential to benefit from the shifts towards digital sales and continuing high levels of execution are undeserving of its 20% discount to peers," said the analysts.

In addition to upping its target price on Codemasters, Berenberg also reiterated its 'buy' rating on the firm's stock.