Following on from the news that VW has started production in China, with Seeing Machines DMS and OMS tech in Magna’s rearview mirror, Stifel has reiterated its 9.6p price target and confirms SEE as one of its top picks.

In a flash note issued today, Stifel analyst Peter McNally wrote:

“The significance to us is that production is happening on time. As we heard at the Townhall event earlier this year, Seeing Machines was expecting the start of production of a number of programmes this year with one significant one over the summer (which we believe happened on time) and a second larger one later in the year. So, the announcement is good news that it is starting toward the early part of calendar Q4.

“We also note that this is for both DMS and OMS which typically indicates better ASP than DMS alone. We see this as a positive development as the company approaches its target of run-rate cash flow break-even by the end of the year.

“We don’t think this announcement has anything to do with the Magna loan but is purely signaling that the production ramp is starting on time. We should be getting fiscal Q2 KPIs in the next couple of weeks. The company remains one of our top picks at 14.4x FY26E EV/EBITDA. Buy.”

It should be remembered that current broker estimates don’t include estimates for revenue from sales in China, so I’m expecting broker upgrades in due course.

The writer holds stock in Seeing Machines.