Auto 2.0: Mobileye In The Context Of The Car Industry

For the auto industry, the 21st century will be defined by new technology, and analysts believe that Mobileye NV (NYSE: MBLY) is positioned to be a major player. Barclays analyst Brian Johnson likes what he sees from Mobileye’s Q1 results, but the Mobileye story is all about the future.

“MBLY announced its EyeQ5 chip, showed progress in REM and EyeQ4, and is finalizing details around two projects for fully autonomous driving,” Johnson explained.

“This progress shows that in addition to MBLY’s solid results today, it is also accelerating its move to be at the center of the autonomous driving ecosystem.”

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Johnson sees the REM project as the best chance for a near-term catalyst for the stock. He believes Mobileye will begin shedding some light on the potential business impact of the REM program within the next six months.

Barclays isn’t the only firm with a bullish take on Mobileye. Morgan Stanley analyst Adam Jonas recently named Mobileye and Tesla Motors Inc (NASDAQ: TSLA) the two companies best-positioned for what it calls “Auto 2.0” in the U.S. market.

Jonas said 10 trillion miles and hundreds of billions of vehicle hours are now up for grabs, and there will continue to be unprecedented competition among established names and auto industry newcomers to capitalize on Auto 2.0.

Barclays considers Mobileye a Top Pick and maintains an Overweight rating and $50 rice target for the stock.

Disclosure: The author holds no position in the stocks mentioned.