KeyBanc Names CES Auto Winners

KeyBanc is more positive in the outlook for autonomous-related revenue growth for larger suppliers like Autoliv Inc. ALV, Delphi Automotive PLC DLPH, Gentex Corporation GNTX, Magna International Inc. (USA) MGA following the consumer electronics show, which was held between January 5 and 8.

Expectations, Analyst Commentary

Analyst Brett Hoselton expects ADAS (Advanced Driver Assistance Systems)/Autonomous businesses of Autoliv, Delphi and Magna to benefit from above-industry revenue growth (i.e., about 20 percent CAGR) at solid margins for many years to come.

Meanwhile, Hoselton is leaning more neutral on certain suppliers, like Mobileye NV MBLY, which have very high growth expectations.

The largest suppliers, such as Autoliv and Delphi, are focusing on smaller automakers who don’t have the resources to develop their own ADAS, while maintaining the ability to supply system components and/or software.

On the other hand, larger OEMs, like Audi and BMW — among others, continue to form partnerships with key technology enablers like Mobileye and NVIDIA Corporation NVDA in trying to build a more customized autonomous platform.

The analyst is Overweight on Delphi, Gentex and Magna, while Sector Weight on Autoliv, Mobileye and Nvidia.