Deutsche Bank Reiterates Buy Rating on Mobileye (MBLY) Ahead of Potential Announcement on BMW Partnership

Deutsche Bank reiterated its Buy rating on Mobileye N.V (NYSE: MBLY) and price target of $72. Earlier BMW, Mobileye, and Intel announced a media event on Friday. Analyst Rod Lache thinks BMW and Mobileye may announce a strategic partnership for the development of Autonomous Vehicles.

"We would not be surprised by this development, as Mobileye has indicated that up to 5 additional OEMs could announce partnerships this year, following the announcement of REM Alliances with GM, VW, and Nissan in January. Mobileye also recently indicated that they had secured production contracts for Autonomous Vehicles from 2 OEMs, and several others will follow," said Lache.

"We spoke to Dr. Werner Huber, Head of Driver Assistance, Perception, and Automated Driving Research at BMW just last week. During our discussion we asked about how BMW is working with suppliers, and how future ADAS sourcing decisions will be made (i.e. Will BMW re-assess the field of ADAS technology suppliers through a bidding process every 2-3 years?)," continued the analyst. "During our discussion, Dr. Huber suggested that BMW assessed Mobileye to be very far ahead of the competitive field w/r/t Artificial Intelligence for Driver Assistance and Automated Driving (BMW concluded an assessment of all global competitors in 1Q15, and they dropped a large German ADAS supplier in favor of Mobileye at that time). Dr. Huber indicated that the BMW Group views Mobileye as a Strategic Partner, and he suggested that their work together will be a long term relationship (i.e. we do not expect contracts to be put out to bid every 2-3 years).

"We believe that this and other potential developments in the near term should support our view that Mobileye is establishing a longer term sustainable lead. We continue to view MBLY’s shares as one of the best ways to invest in the Autonomous Driving theme," Lache added.

For an analyst ratings summary and ratings history on Mobileye N.V click here. For more ratings news on Mobileye N.V click here.

Shares of Mobileye N.V closed at $41.96 yesterday.

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