Mobileye (MBLY): Volvo/Uber Partership A Positive - Evercore ISI
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Evercore ISI analyst, Chris McNally, reiterated his Buy rating on shares of Mobileye N.V (NYSE: MBLY) after Uber, the poster child for shared mobility., announced signing a $300MM spending pact with Volvo to introduce “driverless cars” by 2021.
The JV will begin testing vehicles with actual UBER customers in Pittsburgh (driver supervised) by as early as year-end. This is a next-step extension of the Volvo's L4 test program discussed in January 2016 at CES. Co-investment by UBER will allow Volvo to increase its pace of development. UBER also surprised by announcing the acquisition of Otto, the recently founded trucking-focused autonomous company started by Anthony Levandowski (former Google Self-driving car team) for ~$681MM.
The UBER partnership with Volvo, however, is a positive for MBLY given the company's strong Volvo relationship and new award of the L3-capable tri-focal mono solution for the Volvo Drive Me project. The analyst believes the L4 algo development for this UBER test project, remains unclear (and likely not fully determined yet). Volvo could initially use internal algorithms for L4 robotaxi/geofenced (like Ford) and/or simultaneously dual track an unrestricted consumer L4 program through MBLY over time. The analyst believes that unlike Ford, Volvo is taking a more MBLY-friendly incremental autonomous approach through the use of MBLY’s trifocal (and L3).
No change to the price target of $60.
Shares of Mobileye N.V closed at $46.05 yesterday.
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