Mobileye rises after RBC Capital points to company being close to winning a contract

Update: The story was updated with comments from General Motors.

Mobileye Global (NASDAQ:MBLY) stock rose about 6% on Monday after RBC Capital said that the company could be close to winning a contract, following the release of a presentation as part of the company’s investor event in Munich.

Analyst Tom Narayan said that one of the slides in the presentation could suggest the company is close to a nomination for a Japanese original equipment manufacturer, or OEM. Another slide indicates that the next to nomination stage says “2-3 months.” Also included is a European OEM, the company could be close to a nomination for Surround ADAS. A U.S. OEM is noted as within the negotiation and decision-making step. This comes before the nomination step, the analyst added.

Narayan noted that while not an award yet, the stage this Japanese OEM is at, could mean it is close to being won. He added that in their conversations with investors, this is the number one question — if Mobileye will announce an OEM SuperVision, or SV, win.

SuperVision is the company’s advanced driver-assist system.

Narayan said they were not expecting a win announcement at the event but the possibility that the company could be close is a positive.

The analyst thinks that the four Japanese OEMs, which could be in the mix, are Honda (HMC), Toyota (TM), Nissan (OTCPK:NSANY) (OTCPK:NSANF) and Mazda (OTCPK:MZDAY) (OTCPK:MZDAF). A Honda or Toyota win could be significant, according to the analyst, due to volumes.

The analyst wonders if the U.S. OEM in the negotiating phase for Surround ADAS could be General Motors (GM) and the European OEM close to nomination for Surround ADAS could be Stellantis (STLA) or Renault (OTCPK:RNSDF).

Mobileye did not respond to a query from Seeking Alpha till the time of publication of this report.

“We’re not going to engage in the rumor and speculation,” said General Motors in an emailed statement to Seeking Alpha.

Honda, Toyota, Nissan, Stellantis and Renault also did not respond to a query from Seeking Alpha till the time this report was published.