By Senad Karaahmetovic
Shares of Mobileye (NASDAQ:) are up over 2% in pre-market Monday after sell-side analysts initiated research coverage on the company developing advanced driver-assistance systems (ADAS).
At least 12 firms initiated coverage on Mobileye, including nine at Buy or equivalent rating. Bank of America, Wolfe Research, and Morgan Stanley have opted to stay on the sidelines.
Mobileye stock soared on its market debut in late October after parent company Intel (NASDAQ:) decided to price the initial public offering (IPO) at $17 billion, far below earlier expectations. However, shares soared over 30% since the IPO to push the market capitalization closer to $23B.
The most bullish new coverage comes from Citi analysts, who initiated with a Buy rating and a Street-high $77 per share price target, which implies an upside potential of about 170% relative to Friday’s closing price. They also named Mobileye as Citi’s new Top Supplier Pick.
“Mobileye is at the center of what we have long viewed as the most virtuous cycle of incremental content to ever occur in the industry. We believe the company’s competitive advantages have only grown in recent years, led by an innovation-data loop and a highly scalable ADAS-AV product suite,” the analysts said in a client note.
The analysts see Mobileye hitting over $50B in revenues by 2030, while “a domino effect of ADAS/AV adoption [could] create a catalyst-rich environment for the stock.” Even without autonomous vehicles (AVs), Michaeli sees MBLY price hitting his price objective.
On the other hand, BofA analysts are less bullish on the company as they started with a Neutral rating and a $34 per share price target.
“We remain concerned that the competitive landscape for ADAS/AV technology is incredibly fierce, and MBLY’s “black box” approach could open up opportunities for its competitors to gain share. We’d also note that the pathway/timing around Level 2+ ADAS and Level 4+ AV capabilities is unclear and there are risks associated with the US’s recently announced export control limitations of key semiconductor technology,” the analysts wrote in a client note.
Mobileye stock price closed at $28.42 on Friday.