Mobileye (MBLY) Gains on NHTSA Push for Automatic Emergency Braking

Shares of Mobileye N.V (NYSE: MBLY) are modestly higher Friday (+1.7%) after The National Highway Traffic Safety Administration (NHTSA) announced that it plans to add two automatic emergency braking (AEB) systems to its list of recommended safety features under the U.S. NCAP program. Citi analyst Itay Michaeli views this as positive for Mobileye.

While NHTSA's announcement is not a regulatory mandate requiring automakers to implement AEB, in Michaeli view it's a strong endorsement that could raise consumer awareness/demand and automaker willingness to feature AEB more prominently in vehicles.

AEB is a more complex feature than forward-collision warning (FCW), and Mobileye is a clear leader in this application, the analyst notes.

"The EyeQ3 chip will soon launch the first world-wide camera-only full auto braking AEB with Audi, and we believe multiple OEMs are lined-up in the coming years to do the same," the analyst comments. "The obvious benefit of camera-only is that it saves automakers the cost of additional sensors, a consideration that can become more important when regulations come into play. Additionally, Mobileye’s 2015 launch of deep layer networks for free space pixel labeling is another advantage in that it offers automakers the option to consider (and market) AEB that can do more than just stop. If nothing else, NHTSA’s validation could signal to automakers that AEB mandates are coming sooner or later. Already a handful of automakers are featuring AEB prominently in car commercials, and today’s news might signal others that they should swiftly follow."

In addition to Mobileye, Delphi (NYSE: DLPH), Magna (NYSE: MGA) and Autoliv (NYSE: ALV) stand to benefit from faster ADAS adoption

Citi maintained a Buy rating and price target of $62 on MBLY.

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 $39.70 yesterday.

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