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Deutsche Bank Is Buying Mobileye On VW And GM Support, Expects Stock To Double

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Deutsche Bank Is Buying Mobileye On VW And GM Support, Expects Stock To Double
  • Mobileye NV (NYSE: MBLY) shares have declined 33.74 percent over the past six months, dropping to $36.13 on January 5.
  • Deutsche Bank’s Rod Lache has maintained a Buy rating on the company, with a price target of $72.
  • The stock declined 9.5 percent following aggressive comments from NVIDIA Corporation (NASDAQ: NVDA), which Lache believes “spooked investors in Mobileye.”

Analyst Rod Lache explained that the recent selloff in the stock was driven by several factors, including NVIDIA’s comments that suggested that competition might rapidly be catching up to Mobileye in the ADAS/Vision market.

However, following “numerous discussions” with consultants, suppliers and automakers, Lache disagrees with NVIDIA, saying, “Even MBLY's largest and most capable competitors continue to tell us that replicating the accuracy of MBLY's latest systems is much harder investors perceive.”

Also, the barriers to entry in this market are very high, but more importantly, Mobileye continues to extend its lead against competition, while constantly innovating. This is evidenced by the announcements made by two of the largest global auto OEMs on January 5.

According to the Deutsche Bank report, General Motors Company (NYSE: GM) “announced that it plans to use Mobileye's innovative new digital mapping technology, and GM characterized it as a critical enabler for achieving semi- and fully-autonomous driving.”

In addition, during a “high profile keynote presentation at CES,” CEO Dr. Herbert Diess of Volkswagen AG (ADR) (OTCMKTS: VLKAY) announced that his company has signed a “Strategic Partnership” with Mobileye.

“VW also plans to use MBLY's vision mapping and object recognition technology,” Lache stated, adding, “Mobileye's prominent involvement in this keynote should be viewed as a clear positive.”

Latest Ratings for MBLY

DateFirmActionFromTo
Apr 2017BairdDowngradesOutperformNeutral
Mar 2017Piper SandlerDowngradesOverweightNeutral
Mar 2017Goldman SachsDowngradesBuyNeutral

View More Analyst Ratings for MBLY
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