Citi’s Itay Michaeli believes that Mobileye NV MBLY has the potential to “gradually position itself as the core operating system for autonomous vehicles.”
The analyst reiterated a Buy rating on the company, with a price target of $66.
Following a meeting with the company’s senior management, Michaeli expressed increased confidence in Mobileye’s long-term story.
Auto Industry Trends And Mobileye
“The auto industry is undergoing a transformative evolution that’s introducing both exciting new revenue opportunities but also threats from non-traditional entrants,” Michaeli mentioned.
In order to stay ahead of the competition, Michaeli believes that automakers have already been and were likely to increasingly view Mobileye as a strategic partner.
This is not only due to the company’s leading AI technology and field expertise, common interests and target of a fully autonomous solution worth $20,000 by 2021, but also due to Mobileye’s crowdsourcing solutions “that leverage the very advantage traditional OEMs has over newcomers—size/scale.”
Long-Term ASPs
Michaeli also pointed out that given the incrementally complex semi-autonomous features, REM, driver policy and open deep-learning, automakers’ switching costs were likely to rise, as would Mobileye’s long-term ASPs.
The analyst noted that management appeared confident of the company’s competitive positioning.
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