Mobileye cut to Neutral at UBS

UBS downgraded Mobileye Global (NASDAQ:MBLY) to Neutral from Buy and reduced the price target to $14 from $20.

Analysts led by Joseph Spak noted that Mobileye’s stock has meaningfully underperformed, and the company’s challenges (China mix, SuperVision pushouts, technological concerns) are now well appreciated by the market. The analysts believe Mobileye holds long-term value as a partner for non-Chinese automakers, but a return to growth is further out, and 2025 looks to be a transition year.

The analysts think material negative revisions are needed for consensus forecasts (UBS’ 2025-27 revenue estimate is on average about 28% below consensus). Investors, the analysts spoke to, think that the stock could tread water until the “reset” is complete. In addition, Intel’s ownership adds another layer of uncertainty.

Last month, Intel (INTC) said that it had no plans to divest its majority holding of Mobileye, which develops advanced driver assistance systems, or ADAS, and autonomous driving technologies.

Mobileye (MBLY) has a Strong Sell rating at Seeking Alpha’s Quant Rating system, which consistently beats the market. Meanwhile, the Seeking Alpha authors’ average rating is Hold, and the average Wall Street analysts’ rating is more positive with a Buy.