Mobileye's (MBLY) Buy Rating Maintained at Deutsche Bank; Analyst Sees Strong ADAS Momentum
Deutsche Bank maintained a Buy rating on Mobileye N.V (NYSE: MBLY) with a price target of $55. Comments follow its Q1 results. Analyst Rod Lache believes data points suggest advanced driver assistance systems (ADAS) are gaining traction.
"Mobileye’s Q1’15 EPS of $0.08 was exactly in line with our est. Revenue rose 28% yoy; slightly better than our +23%. Operating margin was 46% vs. DBe of 47%. But more importantly, the company’s commentary suggested that adoption of the company’s technology is steepening, and their ASP’s could rise much faster than the Street has been expecting," said Lache.
"Several suppliers have recently noted that OEM activity has accelerated meaningfully. There have been several drivers of this growth, including: 1) Government initiatives (we believe that the U.S. and China are about to adopt more proactive policies encouraging FCAM by requiring it for 5-Star Safety Ratings); 2) Consumer demand; and 3) Competitive actions (Nissan announcing standard FCAM in Japan, Toyota is rolling this technology out at relatively attractive prices, and we believe that at least one major European luxury automaker is preparing to make FCAM a standard feature)," continued the analyst.
Lache added, "Momentum behind more advanced ADAS functionality appears to be building. MBLY is now engaged with 13 OEMs in development of semi-autonomous driving capability (this represents an increase from 8 OEMs as of last summer). Most of these programs will launch in the 2018-2019 timeframe. From our own research we believe it’s conceivable that up to 10% of MBLY's volume could be semi-autonomous within the relatively near term (i.e. next 4-5 years). This compares with the 2.7% penetration incorporated into our model for 2018. This is clearly bullish for ASP’s (semi-autonomous functionality is typically priced in the $150 range, vs. $43-$45 for MBLY’s current programs)."
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 $46.57 yesterday.