"Cars are changing dramatically, with technologies such as automation, electrification and connectivity having a disruptive impact on the market. Of stocks with exposure to these themes, we think MBLY and DLPH ... are the best ways to invest," the note said.
Piper initiated coverage of both stocks with an "overweight" rating, placing price targets of $82 and $50 on Delphi and Mobileye, respectively.
"We think buying MBLY is the best way for investors to experience multiple years of 40%+ growth without fretting too much about competition," the note said. "For investors seeking a lower multiple than MBLY, we recommend DLPH. The stock trades at just over 11x our FY16 EPS estimate — not too demanding for a company whose EPS should grow by 12%-16% annually through 2018."
Shares of both Delphi and Mobileye are down 21 percent and 14 percent year to date, respectively. On Friday they were down more than 2 percent.
MBLY (blue) and DLPH (green) in 2016Source: FactSet
Disclosures: Piper "usually" provides bids and offers for the securities of Mobileye and Delphi.