NEW YORK (TheStreet) -- Shares of Mobileye (MBLY) are advancing after Deutsche Bank upgraded the stock and Citigroup wrote that it was more confident after meeting with the company's CFO. Mobileye designs software and chips for camera-based, advanced automatic driver-assist systems, or ADAS.
WHAT'S NEW: Deutsche Bank's checks indicate that Mobileye has had more contract wins than expected, Rod Lache, an analyst at the bank stated. The company has won all of the visual ADAS deals awarded over the past several months, he believes. Moreover, there is evidence that competitors are falling behind Mobileye in ADAS, according to Lache. More evidence of this trend may arise in coming months as several large contracts are awarded, the analyst believes. Future contract awards should mitigate investors' concerns about the outlook for Mobileye’s Trifocal semi-autonomous solutions, Lache contended. He upgraded Mobileye to Buy from Hold and set a $53 price target on the shares. After meeting with Mobileye's CFO and its Senior VP, Business Development, Citi analyst Itay Michaeli wrote that he had more confidence in his long-term upbeat outlook on the stock. Trifocal is doing "very well," and is ahead of schedule in some cases, Michaeli quoted the executives as saying. This trend is significant, since Trifocal is designed to facilitate complex autonomous driving and sells at three times higher prices than the company's less advanced solution, the analyst stated. Additionally, like Deutsche Bank's Lache, Michaeli thinks that Mobileye is widening its lead over its competition.Mobileye believes that it can maintain market share of over 50% over the longer term, the analyst stated. He kept a $62 price target and Buy rating on the shares.
WHAT'S NOTABLE: Barclays and research firm William Blair issued positive notes on Mobileye yesterday, with Barclays saying that the recent weakness in the stock creates a buying opportunity and William Blair stating that its recent meetings with Mobileye's management reinforced the company's "long-term, sustainable growth opportunity." Barclays maintained an Overweight rating on the stock, while William Blair kept an Outperform rating.
PRICE ACTION: In mid-morning trading, Mobileye gained 4.2% to $43.57.
Reporting by Larry Ramer.