Goldman Sachs upgraded its rating on Mobileye (MBLY) to buy from neutral and hiked its price target on the stock, saying the company is well positioned in the race to develop self-driving cars.
Separately, Mobileye’s former partner, Tesla Motors (TSLA), on Thursday also got an upgrade and price-target hike, from Morgan Stanley.
Mobileye is a leading developer and supplier of computer vision technology that interprets the visual field of an in-car camera to anticipate and prevent collisions.
Goldman Sachs analyst Alexander Duval raised his price target on Mobileye to 50 from 40.
Mobileye stock finished 3% higher at 43.34 in the stock market today, hitting a four-month high and holding above its 50-day and 200-day moving averages.
IBD’S TAKE: The market for driverless car technology is increasingly competitive, with Mobileye playing a key role. Safety questions or not, the self-driving car era is arriving fast, perhaps even this decade.
In late December, Mobileye announced it will partner with digital mapping company Here, owned by a consortium of German automakers, to develop a precise global map that can be used for hands-free driving and location services. Here poses a threat to Google Maps-owner Alphabet (GOOGL)
Duval said the Here deal makes it more likely that Mobileye will sign deals with automakers that could boost the stock.
“Mobileye’s recent partnership with Here, leveraging its REM crowd sourced mapping solution, indicates its confidence in its ability to generate a significant amount of mapping data,” Duval wrote in a research note.
The three owners of Here are BMW (BMWYY) Mercedes-Benz and Audi, which together acquired the mapping business from Nokia (NOK) in August 2015 for $3 billion. Volkswagen (VLKAY) is the parent company of Audi.
That deal follows a joint venture Mobileye has with Intel (INTC) and BMW to develop a fleet of 40 self-driving vehicles by the second half of 2017. Intel is providing a broad set of in-vehicle technology with cloud computing, connectivity. Related to this, Intel early this month introduced Intel Go, “a new brand for our automotive technology” with the goal of having Intel processors integrated into driverless cars. Intel also says it will also acquire a 15% stake in Here.
Every major automaker, including Tesla, General Motors (GM) and Ford (F), along with the Waymo car unit of Alphabet, have driverless car programs. Alphabet last month announced it is spinning out its self-driving car efforts from its research lab into its own business unit called Waymo.
Meanwhile, Tesla stock rose 2.3% to 243.76, a nine-month high, after Morgan Stanley raised its price target on Tesla to 305 from 242 and upgraded the stock to overweight from equal weight.
Morgan Stanley said Tesla’s stock price will be driven by improved hopes for a 2017 launch of the Tesla Model 3, among other factors. The investment bank has increased its estimates for electric vehicle sales, in part thanks to a “surprisingly supportive political environment,” it said in its report.