Morgan Stanley Says Now Is The Time To Own Mobileye - Mobileye Global (NASDAQ:MBLY), Toyota Motor (NYSE:TM)

In a report published Wednesday, Morgan Stanley analyst Ravi Shanker commented that the time is now to own shares of

Mobileye NVM MBLY given multiple upcoming catalysts that will reinforce the bull case. Shanker continued that Mobileye's momentum will accelerate in 2015, driven by three key catalysts. Growing Confidence in ADAS
According to Shanker, recent announcements by Nissan and Toyota Motor Corp TM making Advanced Driver Assistance Systems (ADAS) a standard option in select markets while offering the feature as a low-cost option in other markets is the first major move by an auto manufacturer to adhere to NCAP and insurance standards that benefit ADAS. The analyst continued that this could set off a "cascade" of similar announcements by competing auto manufacturers over the next 12 to 18 months. Over a longer-term period, ADAS penetration rate is expected to reach 40 percent of global sales by 2020.
Looking At Volkswagen
Shanker noted that Volkswagen is expected to make a decision regarding its ADAS strategy "sooner rather than later" and the company's decision could bode well for Mobileye. If Mobileye were to win a contract from Volkswagen, the analyst estimated it could generate $400 million in revenue over time but, perhaps more importantly, a deal would "deflate bear arguments." 2015 Estimates Are Low
Finally, Shanker argued that consensus estimates for 2015 has not really risen since the company's IPO nine months ago, despite a "huge" beat in the second half of 2014. In addition, the depreciation of the Israeli New Shekel (Mobileye is based in Jerusalem, Israel), coupled with continued margin expansion could drive upside versus consensus estimates and company guidance.
Analyst Rating
Shares remain Overweight rated with a price target raised to $68 from a previous $65.

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