Citi starts Mobileye at Buy, calls it a global leader in vehicle vision

Investing.com -- Citi initiated coverage of Mobileye with a Buy rating and an $11 price target in a note Friday, citing the company’s leadership in advanced driver assistance systems as the auto industry pushes toward autonomy.

“Autonomous driving begins with vision, and Mobileye is the global leader with vehicle vision solutions,” the analysts wrote.

Citi expects the global auto industry to keep finding ways to improve vehicle safety. In its view, autonomous technology will be at the forefront of that improvement over the next decade.

“Mobileye has been a global leader in advanced driver assistance systems (ADAS) for 25 years and has extended into autonomous driving technologies,” the firm added, explaining that its systems have been installed on about 1,400 models and more than 230 million vehicles worldwide.

By 2028, the company is expected to launch more sophisticated, higher-content systems with global automakers.

Citi stated that in the U.S., installation rates for advanced safety systems have risen from below 20% in 2015 to around 90% or more on most components. Rates are said to be similar in Europe and continue to expand at the upper end of the Chinese market.

“Financial performance and market potential for MBLY is above the Supplier Comp Group, justifying a premium to the Group, but the concentration on auto warrants a discount to the auto-related semiconductor names,” Citi said.

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