×

Mobileye, Delphi in prime position to do this, Piper Jaffray analysts say

Part of the Mobileye driving assist system is seen on the dashboard of a vehicle during a demonstration for the media in Jerusalem.
Baz Ratner | Reuters
Part of the Mobileye driving assist system is seen on the dashboard of a vehicle during a demonstration for the media in Jerusalem.

Shares of Mobileye and Delphi Automotive are in the best spot to benefit from car automation technology, analysts at Piper Jaffray said in a Thursday note to clients.

"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.