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Watch Mobileye Shares Following Nissan Unveiling

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Watch Mobileye Shares Following Nissan Unveiling
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Nissan Motor Co Ltd (OTCMKTS: NSANY) has recently unveiled its new ProPILOT semi-autonomous highway driving feature for the new Serena minivan, which uses Mobileye NV (NYSE: MBLY) technology. Citi’s Itay Michaeli maintained a Buy rating on Mobileye, with a price target of $66. The analyst mentioned the implications of the latest development.

Nissan’s new Serena minivan, with the ProPILOT feature, will go on sale in Japan later this summer. The carmaker expects to introduce ProPILOT in other vehicles, including the Qashqai in Europe in 2017, followed by the US and China. “We believe the key positive takeaway for Mobileye is that Nissan’s press release highlights ProPILOT as a camera-only configuration,” analyst Itay Michaeli wrote.

Implications

Michaeli noted that Nissan’s ProPILOT system was the first 1st full-speed, camera-only ACC feature that also incorporates automated steering. This suggests an increasing role for camera-only systems, which would go beyond ADAS to also include level-2 semi-autonomous driving.

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Referring to the impact on Mobileye, the analyst commented that more complex systems such as these “should yield incremental ASPs while also raising customer switching costs,” which should help the company “maintain its competitive edge.”

Moreover, redundancy is often important in these systems, and Mobileye’s REM mapping “might be taking on a future role as a “redundancy sensor” (Nissan is one of Mobileye’s future REM customers starting in 2018),” Michaeli stated.

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DateFirmActionFromTo
Apr 2017BairdDowngradesOutperformNeutral
Mar 2017PiperJaffrayDowngradesOverweightNeutral
Mar 2017Goldman SachsDowngradesBuyNeutral

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