RBC Cuts MBLY to Underperform at $5 as Short Score Jumps

MBLY short interest has reached 21% of free float, short sellers notched a 29% target-price cut from RBC this morning, and the ORTEX short score jumped overnight from 64.3 to 73.5. The stock closes at $7.30, still 46% above RBC's new $5 target but 34% below the consensus mean of $11.11.

RBC's Downgrade Lands the Day Before Earnings

RBC Capital's Tom Narayan cut Mobileye to Underperform this morning, taking his price target down to $5 from $7. It is the sharpest single cut this cycle. It is also the most bearish public stance from a major bank on the stock.

That $5 level is worth noting against a backdrop where four other firms have moved their targets lower in October alone. Evercore ISI, which still rates the stock Outperform, cut its target from $16 to $11. TD Cowen cut from $9 to $8 while maintaining a Buy. Morgan Stanley trimmed from $10 to $9 at Equal-Weight. The consensus mean now sits at $11.11. RBC's new target sits $6 below that.

The timing matters. Q3 earnings are scheduled for October 22, one day away. The last print, in July, sent the stock down 8.3% on the day and a further 10% over the following five sessions.

Short Interest at a Multi-Month High

Short interest climbed 22.9% over the past 30 days and now stands at 21% of free float, the highest level in at least a year according to ORTEX data. That works out to roughly 45.4 million shares, with official FINRA settlement data putting days-to-cover at 6.5.

The borrow market itself has tightened abruptly. Availability dropped to 174% on October 20, down from 585% just four days earlier. Still above the level that would indicate genuine stress in the lending pool, but the one-week decline of 67% is the sharpest move in the dataset. Cost to borrow rose 52% over the week to 0.67%, its highest reading in this cycle, though it remains low in absolute terms.

The ORTEX short score jumped to 73.5 on October 20, up from 64.3 the prior session. The short score ranks in the 9th percentile of its sector for bearishness, meaning 91% of comparable names carry a less negative positioning read.

What Sets MBLY Apart From Its Peers

MBLY rose 4% over the past week. The median move for its closest peers over the same period was minus 1.4%. That divergence is notable but context matters: the stock is still down 9% over the past month and has underperformed its peer group sharply year-to-date.

CEO Amnon Shashua holds a Schedule 13D stake of 7.3% as last disclosed in February, a flag that the company's founder retains significant conviction. Intel, which owns 76% of shares outstanding, trimmed 7.5 million shares in its last reported period. That overhang continues to shape the float structure and limits how quickly short interest can become mechanically painful for those on the short side.

The bear case rests on a clear set of facts: return on capital deteriorated from minus 2.37% to minus 3.23% over the last twelve months, SuperVision volume guidance for the second half was cut, and several programme ramps have slipped into 2027.

What to watch: the Q3 print on October 22 and whether management restores a timeline for positive return on capital, the metric RBC and Barclays have specifically cited in their bearish turns.