Written by Cláudio Afonso | LinkedIn | X
Shares of the EV maker Rivian surged over 15% on early Monday after Benchmark analyst Mickey Legg announced that the firm initiated coverage on the stock with a Buy rating and a price target of $18.00 implying a 38% upside potential.
In a new research note, Legg says the firm believes that the U.S. electric vehicle maker is “well positioned to gain significant share of a massive market opportunity in the coming decade.”
Rivian shares fell roughly 60% in the first four months of the year, reaching $8.26. The announcement of a joint venture with Volkswagen Group triggered a significant rally, pushing shares to nearly $19 in July.
Benchmark sees EV production rising over the next years despite a challenging 2024.”After a pause this year, domestic EV production is expected to improve in 2025 and further accelerate in 2026-27 as ASPs [average selling price] decline and the charging infrastructure is built out,” Legg noted before focusing on Rivian.
“Of the EV newcomers, Rivian appears particularly well-positioned with contracts with Amazon (AMZN-Buy, analyst Dan Kurnos) and Volkswagen, highly rated vehicles, expected positive gross profit in the current quarter and sufficient financial liquidity”, the analyst wrote.
Rivian saw its U.S. sales decline year-over-year in November to an estimated 3,625 units, according to Motor Intelligence.
While sales rose by 245 units from October, they fell 23% from the 4,717 vehicles sold in November 2023. Over the first two months of the fourth quarter, Rivian delivered approximately 7,005 R1 vehicles in the U.S., the firm estimates.
Last month, the EV maker secured conditional approval for a loan of up to $6.6 billion from the U.S. Department of Energy to finance the construction of its electric vehicle manufacturing plant in Georgia.
Written by Cláudio Afonso | LinkedIn | X
