Wall Street Talks Up Mobileye (MBLY); Citi Lifts PT to $62
In addition to positive comments from William Blair and a price target hike at Morgan Stanely, newly anointed hot stock Mobileye N.V (NYSE: MBLY) also saw positive comments out of Citgroup today.
Citi analyst Itay Michaeli reiterated a Buy rating and boosted his price target to $62.00 (from $48.00). The hike comes after they attended Day-1 of the ITS World Congress where they picked up data points supportive of their Mobileye thesis.
The analyst had three main takeaways: Toyota, GM and Suppliers.
Takeaway #1 (Toyota) - Toyota is one of few remaining large OEMs that has yet to enter production with Mobileye, but is rather in an evaluation phase. In our initiation report we discussed how an eventual win with Toyota would be a major milestone for Mobileye. At ITS today, Toyota unveiled its Automated Highway Driving Assist (AHDA) system that we were able to confirm utilizes mono + radar. Our conversations led us to believe that: (1) Toyota views mono as a more ideal camera sensor than stereo (used by Lexus) for wider ADAS adoption; (2) recognizes Mobileye's distinct technological advantages; and (3) expects to source more ADAS suppliers over the medium-term. While timing remains unclear, we walked away feeling better about this potential catalyst.
Takeaway #2 (GM) - GM formally announced that it will launch its "Super Cruise" hands free highway lane-following application with Cadillac in 2017. The system appears to utilize mono vision (we noticed two front-facing cameras though we do not think it's a trifocal system, yet). Though we cannot confirm this to be a Mobileye launch, GM’s 2025 industry vision called on these types of systems to be available in practically all vehicles,in addition to partial or fully automated urban applications. This penetration outlook - we believe GM’s first public 2025 prediction - seems consistent with our > street modeling.
Takeaway #3 (Suppliers) - We spoke with a few Tier-1s including Mobileye partners and stereo proponents. Partners shared a positive long-term view of the camera-based ADAS/autonomous market (surround-view also an opportunity not in our #s) while stereo proponents openly acknowledged mono’s advantages and Mobileye's leadership.
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Shares of Mobileye are up 9.3% mid-day to $57.93.