We See Significant Upside For Mobileye Shares, Says Deutsche Bank
In a research report published today, Deutsche Bank analyst Rod Lache upgraded shares of Mobileye (NYSE:MBLY) from Hold to Buy rating with a $53 price target, as shares have declined by 28% since their peak in early Oct. (vs a 5.5% increase in the S&P 500), and now offer 27% upside to the analyst’s target.
Lache wrote, “We continue to believe that the advent of Advanced Driver Assistance Systems represents one of the most compelling growth themes in the Global Auto Industry. And we continue to believe that Mobileye’s IP offers leading functionality, accuracy, and cost, which positions them to sustainably lead this market.”
The analyst explained his new price target, “This target corresponds with a DCF model that incorporates a 10% discount rate (DCF model actually indicates ~$55 fair value). This also calibrates to a ~30x multiple applied to our 2020 est, which we discount back to year-end ‘15 at 10% per year. Incorporated into our model is an assumption that Autonomous Emergency Braking technology will achieve global penetration of 45% by 2020 and 80% by 2025, vs. an est’d global penetration of ~6% in 2013.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rod Lache has a total average return of 17.6% and a 70.2% success rate. Lache has a 26.0% average return when recommending MBLY, and is ranked #171 out of 3395 analysts.