JPMorgan maintains Underweight on Mobileye stock, target $10

On Tuesday, JPMorgan analyst reiterated an Underweight rating with a $10.00 price target on Mobileye N.V. (NASDAQ:MBLY), a company specializing in autonomous driving technologies. According to InvestingPro data, the stock has declined over 43% in the past year and currently trades significantly below its 52-week high of $34.00. The analyst observed that investor interest in the automotive industry and its suppliers, especially those involved in autonomous driving, has seen an uptick this year. This is attributed to recent sales and production trends showing signs of stabilization across various geographies.

The analyst pointed out that the stabilization is a result of improved production in China, despite somewhat challenged production in Europe and North America. Investors are now turning their attention to Mobileye's projections for 2025 and announcements regarding new contracts that could shape the company's growth in 2026 and beyond. InvestingPro analysis reveals that while the company maintains strong financial health with a current ratio of 5.8 and more cash than debt, analysts anticipate a sales decline in the current year. The market's expectation is for a stable growth outlook for 2025 and significant wins to support a higher growth rate in the subsequent years, which would justify Mobileye's premium trading multiple.

Despite these expectations, the analyst noted the absence of recent new wins and a more competitive environment for autonomous and semi-autonomous products. As a result, JPMorgan has moderated its earnings growth forecast for the coming years. The firm's earnings per share (EPS) estimates through 2030 are now approximately 20% below the consensus on average.

For 2025, the analyst expects first-quarter guidance to align with consensus expectations and has updated the full-year revenue expectations to slightly below consensus. This leads to the belief that announcements of new customers will likely have a greater impact on Mobileye's share price than the upcoming guidance itself.

In conclusion, the analyst reiterated the Underweight rating, citing a lack of substantial evidence of commercial ramp-up of semi-autonomous and autonomous products in series production with Western original equipment manufacturers (OEMs). This limitation, according to JPMorgan, restricts the justification for a premium valuation multiple for Mobileye's shares, which are currently trading at 28 times the estimated 2026 EPS. InvestingPro subscribers have access to over 10 additional key insights and a comprehensive Fair Value analysis for MBLY, along with detailed financial health scores that can help inform investment decisions.

In other recent news, Mobileye N.V. has been the subject of numerous analyst updates and other developments. Baird analysts maintained an Outperform rating on Mobileye's stock, highlighting the company's competitive technology and operational resilience, as evidenced by a healthy gross profit margin of 47% and positive free cash flow generation. Oppenheimer initiated coverage on Mobileye with a price target of $28 and an Outperform rating, based on anticipated growth in the evolving automotive industry, despite a 10.26% decline in revenue over the last year.

Loop Capital raised its price target for Mobileye shares to $23, maintaining a Buy rating. Similarly, Needham reiterated its Buy rating on Mobileye shares with a consistent price target of $20. Canaccord Genuity also maintained a positive stance on Mobileye, reiterating a Buy rating and a $25 price target.

In other company news, Mobileye's presentation at the Consumer Electronics Show led to a downturn in stock due to a lack of updates on commercial progress. However, Mobileye continues to expand its market presence and is reportedly close to securing a contract for its Supervised Vision technology with a Japanese original equipment manufacturer. These are recent developments that investors should consider.

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