Key Takeaways

• JPMorgan downgraded Mobileye, citing concerns about the ramp up of its SuperVision driver-assistance system.

• The analysts lowered the rating to "underweight" and reduced the price target by $6 to $10.

• The bank's new price target is substantially below Wall Street's average, according to Visible Alpha data.

Shares of Mobileye (MBLY) dropped Monday after JPMorgan downgraded the company, citing doubts about the growth prospects of its SuperVision driver-assistance system.

The bank reduced its rating on MobilEye to “underweight” from “neutral,” and cut the price target from $16 to $10, below Friday's close just under $13. Mobileye stock was down more than 4% Monday and has lost more than two-thirds of its value this year.

The analysts wrote in a note to clients that they “expect the lower confidence in the volume ramp associated with SuperVision” as Chinese electric vehicle maker Zeekr (ZK) switches to an in-house autopilot system. They cut their earnings and revenue forecasts for the company in connection with the downgrade.

They noted that along with the displacement by Zeekr, falling EV sales and tough EV tariffs in North America and Europe will limit demand for the company. Mobileye is backed by chipmaker Intel (INTC), which last month said it didn't have plans to sell its stake in the company.

JPMorgan's price target for Mobileye stock puts it well below Wall Street's mean under $21, according to Visible Alpha data.

It's expected to be a busy week in the automotive space, with Tesla (TSLA) set for a robotaxi event on Thursday.

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