Written by Cláudio Afonso | LinkedIn | X
Mizuho analyst Vijay Rakesh has raised the firm’s price target on Rivian shares from $11.00 to $15.00 while maintaining a Neutral rating on the stock. The analyst sees the electric vehicle (EV) maker with “a better balance sheet and reduced liquidity risk”.
In a new research note sent out on Friday, Rakesh’s update follows Rivian’s solid June quarter (JunQ) delivery report, which saw the EV maker deliver approximately 13.8k vehicles. A result that the analyst described as ‘solid.’
Despite these positive delivery figures, Rakesh noted that Rivian reiterated its 2024 estimated total deliveries at “low single digits” year over year, which is below the current full-year consensus of around 6% year over year growth.
“While we believe the JunQ was better than expectations of ~11.5k cons, the company reiterated its 2024E total deliveries of up ‘LSD%’ y/y, and we believe below current full year consensus of up ~6% y/y,” he explained.
The analyst also highlighted Rivian’s recent Investor Day, which focused on achieving approximately 20% material cost reductions on its R1 model by the December quarter and aiming for positive gross margins by year-end.
“We would note the recent Rivian Investor Day focus on ~20% material cost reductions on R1 by the DecQ, with positive GMs exiting the year,” Rakesh said.
Volkswagen’s investment — that can go up to $5 billion — is expected to improve Rivian’s balance sheet and reduce liquidity risks. “Key is the recent VW up to $5B investment,” Rakesh noted.
However, Rakesh cautioned about potential demand headwinds for US EVs, particularly in the latter half of 2024 and into 2025.
Despite these challenges, he acknowledged Rivian’s strong product roadmap, including the anticipated launch of the lower-cost R2 model in the first half of 2026 (1H26E).
“Rivian has a good product roadmap with its lower-cost R2 in 1H26E, though we see US EVs softer with potential 2H24/25E demand challenges,” he remarked.
“Adjust estimates and raising our PT to $15 (prior $11) with better balance sheet and less liquidity risk, and adjusting estimates as demand headwinds persist,” Rakesh concluded.
Earlier this week, the company started the rollout of its latest over-the-air (OTA) software update, version 2024.23, for both R1 models (R1S and R1T) from the second generation.
The OTA update marks the debut of the Rivian Autonomy Platform, a suite of advanced driver assistance features. One of them is the “Lane Change on Command” feature, which allows the vehicle to perform lane changes when the turn signal is activated while Highway Assist is engaged.
Rivian‘s Chief People Officer Helen Russell has recently quit after spending nearly five years at the company. Last Friday, the company announced last Friday its Chief Accounting Officer Jeffrey Baker has resigned to pursue another career opportunity.
Earlier in the week, the German media outlet Handelsblatt reported that Rivian and Volkswagen were in discussions to extend their recently announced software partnership into hardware collaboration and joint production.
However, when contacted by Reuters, the US-based electric vehicle (EV) maker Rivian stated that it has no plans to produce vehicles with Volkswagen Group.
Volkswagen Group said recently it was set to invest up to $5 billion in the US-based electric vehicle maker Rivian to leverage its technology and form a joint venture.
Written by Cláudio Afonso | LinkedIn | X
