Market Overview

Jefferies Positive On Potential Alphabet-Honda Deal Over Self-Driving Cars

Share:
Jefferies Positive On Potential Alphabet-Honda Deal Over Self-Driving Cars
Related GOOGL
Citron Goes Full Bull On Roku
Out With The Old, In With The New: Telecom Sector To Become Communications Services Sector
Netflix Just Got Cheaper (GuruFocus)
Related HMC
Auto Stock Roundup: GM, Honda, Tesla And More
April Auto Sales Fall; Fiat Chrysler's Jeep Is 'Back In The Game'
Stocks To Watch: Powerhouse CEOs In The Limelight (Seeking Alpha)

Jefferies is positive on an announcement from Honda Motor Co Ltd (ADR) (NYSE: HMC) that it has entered into formal discussions with Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)'s Waymo over integration of its self-driving technology with Honda vehicles.

Way More Progress With Waymo

The news comes just a week after Alphabet announced it is spinning out its self-driving car project into a new company called Waymo. Alphabet is investing heavily in self driving technology and has logged over 2 million driverless pre-mapped miles (and another billion in simulation) since testing began back in 2009.

The potential deal could allow Waymo to deploy its self-driving sensors and software in Honda vehicles.

“The news supports our expectation that Waymo will be focused on technology with the potential to license to vehicle manufacturers rather than making the cars themselves,” analyst Brian Fitzgerald wrote in a note.

The Technology

Currently, the analyst said he is mostly at Level 2 (according to NHTSA automation levels), which is essentially partial automation or “hands off” rather than full conditional automation or “eyes off.” He believes no company has full autonomous vehicles in production.

“While we are encouraged by the advancements Google is making, right now we do not have self-driving vehicle efforts modeled in our long term numbers,” Fitzgerald continued.

The analyst seeks parallel development of both connected and autonomous vehicles. As of now, connected vehicle technology currently lags autonomous vehicle technology, but both can develop in tandem along with proper infrastructure support.

Meanwhile, Research and Markets forecasts the global autonomous vehicle development platform market to grow at a CAGR of 105.56 percent during the period 2017–2021 on improved smartphone ecosystem.

Analyst's Bottom Line

Fitzgerald has a Buy rating on Alphabet shares, with a price target of $1,000.

Latest Ratings for GOOGL

DateFirmActionFromTo
Apr 2018Stifel NicolausUpgradesHoldBuy
Apr 2018BarclaysMaintainsOverweightOverweight
Apr 2018Morgan StanleyMaintainsOverweightOverweight

View More Analyst Ratings for GOOGL
View the Latest Analyst Ratings

Posted-In: Analyst Color News Price Target Contracts Reiteration Travel Analyst Ratings Tech Best of Benzinga

 

Related Articles (GOOG + GOOGL)

View Comments and Join the Discussion!