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Mobileye Is Auto Industry's 'White Knight,' According To Citi

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Citi’s Itay Michaeli believes that Mobileye NV (NYSE: 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.

Related Link: Morgan Stanley Maintains Overweight On Mobileye, Lowers PT To $48.00

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.

Latest Ratings for MBLY

DateFirmActionFromTo
Apr 2017BairdDowngradesOutperformNeutral
Mar 2017PiperJaffrayDowngradesOverweightNeutral
Mar 2017Goldman SachsDowngradesBuyNeutral

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Posted-In: Citi Itay MichaeliAnalyst Color Long Ideas Reiteration Analyst Ratings Tech Trading Ideas

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