Jefferies upgrades Aston Martin to ‘hold’, hikes price target

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."

At 1005 BST, the shares were up 3.9% at 289.60p.