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Daiwa starts Mobileye at Buy, ‘we are positive about the potential share price appreciation’

© Reuters Daiwa starts Mobileye (MBLY) at Buy, ‘we are positive about the potential share price appreciation’
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By Michael Elkins

Daiwa Capital Markets initiated coverage of Mobileye Global Inc (NASDAQ:MBLY) with a Buy rating and set their price target on the stock at $50.00.

Mobileye has three main product areas, providing the semiconductor SoC, and the software, as a packaged solution, but open where auto OEMs can adapt their own offerings. The vast majority of revenue today is for base ADAS (advanced driver assistance systems).

Regulators are pushing auto companies to adopt this technology to improve safety. It includes features like emergency braking, auto lane correction, adaptive cruise control and many others. The base ASP for this is $50. The price moves to $100 if mapping is included to aid self-driving safety.

Analysts wrote in a note, “With Mobileye being a pioneer and early leader in ADAS/AV, along with what should be a very big and fast growing area, we are positive about the potential share price appreciation. We estimate the current PE on 2024 EPS will hold, and apply this, at slight discount, to our 2025E, to get a $50 TP and 1/Buy rating. Our rating and target price assume that the S&P 500 remains unchanged over the next 12 months.”

Daiwa initiated 2023/2024/2025 revenue estimates of $2.24b/$2.93b/$3.90b. EPS estimates for 2023/2024/2025 are $0.71/$0.89/$1.10.

Shares of MBLY are down 1% in pre-market trading on Wednesday.

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