Why This Analyst Sees 'Domination' From Mobileye Within A Few Years

In a report published Monday, Morgan Stanley analyst Ravi Shanker maintain an Overweight rating on

, while raising the price target to $80, saying that the company was "already moving from the first (Penetration) phase of its lifecycle to the second (Execution) phase." Analyst Ravi Shanker expects Mobileye to complete its "third phase (Domination) in a few years." With its mono-camera technology, the company had won 22 of the top 25 OEMs across 252 models and was estimated to have captured 60 percent of the volume and 75-80 percent of the value of the global ADAS market for the next 5-7 years. "MBLY has set a very large stage, it is now time to deliver," Shanker wrote. The analyst added that the expectation of declining ASPs in the first few years, on account of faster basic ADAS growth, now appeared "overly conservative." The EPS estimates for 2015, 2016 and 2017 have been raised from $0.41 to $0.45, from $0.75 to $0.76 and from $1.34 to $1.60, respectively. In the report Morgan Stanley noted, "Beyond 2018, we expect MBLY to move out of the Execution phase into Domination of the vision space, as we transition from ADAS to autonomous capabilities. Our conversations with industry sources gives us high confidence that once MBLY already has the valuable real-estate in the car and trust of the OEM and end-consumer, it will be quite difficult to displace them."