Berenberg downgrades Mobileye Global Inc after 47% stock rally
Investing.com -- Berenberg has downgraded Mobileye Global Inc to “Hold” from “Buy,” saying the stock’s sharp rally since March has made its near-term risk-reward profile more balanced despite continued confidence in the company’s long-term autonomous driving opportunity.
The brokerage raised its price target to $10.80 from $9.30 after Mobileye shares surged about 47% following strong first-quarter earnings beat, a newly announced $250 million share buyback, and an improved full-year outlook. Shares closed at $9.66 on May 19.
Berenberg said Mobileye’s first-quarter results highlighted the resilience of its advanced driver-assistance systems (ADAS) business. Revenue came in at $558 million, above consensus expectations of $518 million, while adjusted EBIT reached $95 million, significantly ahead of forecasts. EyeQ chip shipments totaled 10.8 million units during the quarter, supported by Western automaker restocking and strong export demand from Chinese OEMs.
The analysts noted that Chinese automakers’ exports into emerging markets accounted for roughly half of the quarter’s upside. Although these sales carry lower average selling prices and margins, Berenberg said they represent incremental demand in underpenetrated regions rather than cannibalization of Western volumes. Management estimates the shift toward export-driven sales is creating about $0.30-$0.40 of ASP pressure.
Mobileye also recently authorized a share repurchase program worth up to $250 million, equivalent to roughly 3% of its market capitalization, aimed at offsetting dilution from stock compensation and the Mentee Robotics acquisition.
Despite the downgrade, Berenberg said it remains constructive on Mobileye’s long-term positioning in the global ADAS and autonomous driving market, citing the company’s strong EyeQ platform, cash-generative core business, and potential upside from advanced products and robotaxi developments.