Jefferies Starts Coverage With Underperform Rating Mobileye Global (NASDAQ:MBLY) faces potential downside risks tied to structural industry challenges and customer concentration, according to Jefferies, which initiated coverage on the stock with an “underperform” rating and an…
price target. The target implies roughly 24% downside from the stock’s previous closing price of $10.53
Jefferies based its valuation on a sum-of-the-parts methodology using a blended 2027 enterprise value-to-sales multiple of 1.9x across Mobileye’s business segments. That analysis resulted in an estimated equity valuation of approximately $6.51 billion, or $8 per share, based on 816 million shares outstanding. The valuation also incorporated net cash of around $1.59 billion, while the implied price-to-earnings ratio at the target price stands at 21.2x. “We see risk as skewed to the downside given structural threats and key customer dependence,” Jefferies said, adding that “the stock’s re-rating ultimately depends on a small number of highly uncertain outcomes.” Market Leadership Overshadowed by Long-Term Concerns Mobileye, which remains approximately 75% owned by Intel, currently controls an estimated 70% share of the global advanced driver assistance systems market.
However, the company’s stock has fallen around 75% over the past three years, while its enterprise value-to-EBIT multiple has compressed closer to traditional automotive supplier levels after previously trading more like a high-growth technology company, according to FactSet data cited by Jefferies. Revenue and Margin Forecasts Remain Positive Jefferies projects Mobileye revenue of $1.98 billion in 2026, representing growth of 2.8%. The brokerage expects sales to rise to $2.24 billion in 2027 and $2.86 billion in 2028, implying growth rates of 15.2% and 29.2%, respectively.