Peel Hunt has reaffirmed its 'buy' recommendation for Seeing Machines Ltd (AIM:SEE, OTC:SEEMF) with a price target of 7p, following a strategic partnership with Mitsubishi Electric Mobility (MEM).
The agreement includes a £26.2 million investment in the AIM-listed eye-tracking specialist.
Mitsubishi, which produced over 700,000 vehicles last year, adds significant industry scale and credibility to the collaboration, Peel's analysts noted.
The tie-up is expected to drive the adoption of Seeing Machines’ driver and occupant monitoring systems (DMS and OMS) in Japan’s automotive market, as well as bolster aftermarket opportunities in Europe and North America.
The deal secures 18 months of financial runway for Seeing Machines, with break-even targeted by June 2025, Peel added.
Even if OEM production slows, analysts estimate the investment will provide a meaningful cash buffer.
While the shares were up 12% in morning trading at 4.95p, that's still a 41% discount to Peel's valuation.