• Mizuho analyst Vijay Rakesh maintained Mobileye Global Inc (NASDAQ: MBLY) with a Buy and raised the price target from $35 to $40.

• Rakesh updated MBLY estimates post the company reported an inline September quarter and guided to an above-consensus December quarter top-line of $536 million, implying revenue growth of 51% Y/Y.

• Rakesh believed MBLY saw an upside from its SuperVision platform with ramps at Zeekr in 2022 and potentially Geely Automobile Holdings Ltd (OTC: GELYF) (OTC: GELYY) in 2023E.

• Rakesh expected gross margins to decline in 2023E as MBLY ramps lower-margin, much higher ASP, and new Consumer AV (Chauffer).

• IHS released its updated C23E LVP estimates of ~85 million, up slightly from the prior November estimate of ~84.5 million, indicating 4% Y/Y growth after the expected 6% Y/Y growth in C22E.

• Rakesh was more cautious on 2023E LVP as the analyst saw the U.S. and global consumer weaker against a backdrop of increasing rates, with auto loan rates ranging from 7.5% to 12%+ impacting affordability and leading to dropping lead times, higher dealer incentives, and MSRP premiums dropping.

• While 2023 could see Auto headwinds with a stretched consumer, improving Auto supply chains and multiple new product launches for MBLY could remain a tailwind.

• Despite macro headwinds, Rakesh saw MBLY well-positioned as the market leader in ADAS solutions.

• It has a 70% share and relatively less exposure to potential broader LVP weakness, as key front-camera ADAS take rates at ~50% + continue to grow with improved overall ADAS demand and stricter safety regulations.

• Rakesh believes MBLY continues to see a substantial upside as it continues to ramp with Geely's Zeekr unit while also picking up three additional premium design wins at Geely.

• The analyst believes MBLY could see 2023-24E volume ramps at Honda Motor Company, Ltd (NYSE: HMC), Bayerische Motoren Werke AG (OTC: BMWYY), and Toyota Motor Corp (NYSE: TM).

• Price Action: MBLY shares traded lower by 3.77% at $33.20 on the last check Friday.

• Photo Via Company

Latest Ratings for MBLY

View More Analyst Ratings for MBLY

View the Latest Analyst Ratings

See more from Benzinga

• Why Is This Analyst Bearish On Western Digital And Sees Downside?

• Verizon With Stable And Notably Growing Dividend Likely To Beat Other TMT Names Against Macro Headwinds, Analyst Says

Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.