JPMorgan Downgrades Mobileye to Underweight
Investing.com — JPMorgan analysts have downgraded Mobileye from Neutral to Underweight, expressing concerns regarding the company’s SuperVision product and its overall growth outlook.
The downgrade accompanies a revised price target of $10, down from $16. Analysts have diminished confidence in the volume ramp for SuperVision due to market penetration challenges and competitive pressure.
Key Issues Behind the Downgrade
The primary concern driving this downgrade is Mobileye’s loss of a crucial contract with Zeekr, which chose an in-house solution over SuperVision. This setback, paired with limited traction among Western original equipment manufacturers (OEMs), has forced JPMorgan to adjust its growth expectations for SuperVision through the end of the decade.
According to JPMorgan:
“We expect the displacement of SuperVision by an in-house solution at Zeekr and the lowered volume outlook for EVs, especially given tariffs introduced by the EU and North America, to result in SuperVision volumes being flat or declining year-over-year in 2025.”
The implementation of tariffs in both the EU and North America has further complicated Mobileye’s projection for EV-related volumes, raising additional concerns about the company’s growth trajectory.
While the immediate impact on revenue and earnings appears limited, the analysts believe reduced long-term confidence in SuperVision’s volume ramp will negatively influence investor sentiment.
Analysts now value Mobileye similarly to other high-growth auto suppliers but with a modest premium compared to the previously anticipated outsized growth and valuation premium.
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