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 $8 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.

Adjusted EBIT margins are forecast at 10.4% in 2026, 13.7% in 2027 and 19.2% in 2028.

For fiscal 2025, Mobileye reported revenue of $1.89 billion, adjusted EBIT of $280 million and an adjusted EBIT margin of 14.8%.

Relative to consensus estimates, Jefferies said its 2026 and 2027 projections are broadly aligned with market expectations, although its 2028 adjusted EBIT estimate of $550 million is roughly 10% below the $609 million consensus figure.

The firm forecasts adjusted EPS of $0.27 in 2026, $0.38 in 2027 and $0.63 in 2028.

Robotics Acquisition and Buyback Included in Forecasts

Jefferies expects Mobileye’s net cash position to increase from $1.84 billion at the end of 2025 to $2.16 billion by 2028, despite projecting a temporary decline in 2027 linked to acquisition spending.

The brokerage incorporated a $591 million acquisition-related cash outflow in 2026 associated with Mobileye’s planned $900 million purchase of humanoid robotics company Mentee Robotics, consisting of $612 million in cash and the remainder in shares.

Its model also assumes a $250 million share repurchase program in 2026.

Jefferies Highlights Three Key Risks

Jefferies identified three major structural concerns weighing on the investment case.

First, the bank argued that expected growth from higher-autonomy products, including Surround ADAS and SuperVision, is already reflected in market expectations and depends heavily on the Volkswagen Group, which has expressed ambitions to develop autonomous driving capabilities internally.

Second, Jefferies said the planned VW/MOIA robotaxi rollout could act as a short-term catalyst but carries uncertain long-term economics.

Its base-case forecast assumes 1,000 active robotaxi vehicles in 2027, increasing to 13,000 by 2029, generating estimated revenue of $84 million and $530 million, respectively.

However, the firm questioned whether Mobileye’s pricing structure — including a $40,000 upfront fee and $0.20 per mile charge — can scale successfully.

Third, Jefferies warned that competing end-to-end artificial intelligence systems from rivals such as Wayve could challenge Mobileye’s map-based modular architecture.

Bull and Bear Case Scenarios

Jefferies’ upside scenario values the stock at $14.80, assuming revenue exceeds base forecasts by 15%, adjusted EBIT margins reach 15% in 2027, and the stock trades at a 3.5x EV/sales multiple.

Its downside scenario implies a share price of $5.80, based on revenue coming in 15% below expectations, a 10% EBIT margin and a 1.5x EV/sales multiple.

Mobileye Global stock price