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Pro Analysis

Morgan Stanley downgrades this autonomous driving play on rising competition

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.

Morgan Stanley lowered its rating on Mobileye shares to equal weight from overweight, predicting the automated-driving chip firm's leading position will come under pressure.

"We see the ADAS [advanced driver assistance systems] market growing faster than consensus anticipates, but we also see a more rapid commoditization of the enabling tech and sensitivities around data sharing," analyst Adam Jonas wrote in a note to clients Wednesday. "We lower our [price target] … on higher R&D costs, lower share and greater competition."

Mobileye creates the chips, cameras and software that make driver-assistance automation possible for automakers.