By Michael Elkins
Barclays initiated coverage of Mobileye (NASDAQ:MBLY) with an Overweight rating and a $60 Price Target as analysts view the autonomous vehicle company as the auto supplier in Barclays' coverage with the best growth and margin prospects ahead.
Analysts wrote in a note, “We launch with an Overweight rating as we believe MBLY is the highest-quality pure-play in the market leveraged to the secular megatrends of active safety/autonomous vehicles, which should drive robust earnings growth through at least the end of the decade. Moreover, we remain constructive on the catalyst backdrop this year, including continued positive momentum in SuperVision awards and potential for MBLY to exceed its FY23 guidance.”
Over the past 20+ years, MBLY has collected over 200 petabytes of real-world driving data. This data and software advantage underpins MBLY’s dominant position in the vision ADAS market, with a market share of 60%-70% in recent years, and with content on 13 of the top 15 global automakers.
In 2023, analysts expect strong top-line growth due to higher base ADAS penetration and SuperVision. They anticipate some gross margin compression related to the ramp of SuperVision, which is margin dilutive vs. base ADAS due to hardware content. Net net, Barclays remains above MBLY’s guidance on Adjusted Operating Income.
Shares of MBLY are up 0.11% in pre-market trading on Wednesday.