Goldman Sachs Just Upgraded Mobileye To Buy, Sees Revenue Growth Through 2020

In a report published Thursday, Goldman Sachs analyst Alexander Duval upgraded shares of Mobileye NV (NYSE: MBLY) to Buy from Neutral with an unchanged $50 price target.

Duval noted that the PEG ratio has almost halved following recent weakness in the stock. In addition, shares have underperformed his EU tech coverage by around 13 percent year-to-date and around 45 percent since Mobileye shares peaked in October.

Duval added that the decline in shares is mostly due to technical factors, while fundamental factors including a 20 percent plus earnings per share beat in the third and fourth quarter and "significant" customer wins are major positives.

Duval also suggested that the "visibility" from long duration of contracts will support a 34 percent compounded annual growth rate in revenue for Mobiley through 2020.

The analyst estimated the company will control a 65 percent market share in 2020 and ship 15.7 million units, versus 2.7 million units shipped in 2014 and an estimated 4.2 million units in 2015.