Shares of Mobileye NV fell 1.3% in midday trade Wednesday after the company was downgraded to equal weight from overweight at Morgan Stanley. The analysts cut their price target to $44 from $48. The downgrade came as the analysts see a big market for advanced driver assistance systems, but believe gaining share in that market requires lowering prices, which will pressure margins. They believe competition in autonomous vehicles is growing, which requires teaming up with other firms. Those partnerships may require more resources and research and development from Mobileye, they said, adding more costs. Mobileye is a “strong company,” they say, but it faces added costs ahead.
Shares of Mobileye have gained 13% in the past three months, compared to the S&P 500’s gain of 7.7%.
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