NEW YORK (TheStreet) -- Shares of Mobileye (MBLY) were sliding in late morning trading on Wednesday as JPMorgan analysts said the Jerusalem-based auto-parts supplier's partnership with Delphi Automotive (DLPH) won't just benefit the two companies, but also the whole automotive industry, Barron's reports.
Mobileye and Delphi, a Gillingham, UK-based vehicle components manufacturer, announced yesterday that they would develop a self-driving system that automakers could begin to use in 2019.
"The announcement marks perhaps the greatest progress to date towards a single comprehensive industry solution, and is in our view not only a positive for both Mobileye and Delphi, but also for the industry overall, as it likely drives higher adoption of autonomous driving applications generally," the firm said in an analyst note, according to Barron's.
That said, the system may at first only be adopted by ride-share providers, where economics are boosted by labor cost savings, and high-end vehicles, JPMorgan noted.
Smaller automakers would be attracted to the solution as they try to differentiate their systems from those used by larger automakers.
The partnership is likely to boost investor confidence in Mobileye as it leverages its strengths beyond advanced driver assist, and overshadows recent setbacks with Tesla Motors (TSLA) and Ford (F), the firm continued.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate MOBILEYE NV as a Hold with a ratings score of C-. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and premium valuation.
You can view the full analysis from the report here: MBLY