UBS has upgraded Rivian back to a Neutral rating just one month after downgrading the stock to Sell, following the company’s better-than-expected fourth-quarter earnings results.
Analyst Joseph Spak wrote in a new research note — first obtained by PriceTarget — that the firm remains optimistic about the company’s product pipeline, as earlier concerns that the stock’s valuation had gotten “ahead of itself” ease.
The Swiss bank has increased its price target on Rivian shares to $16, which implies a 14.3% upside potential based on Thursday’s close at $14.00.
Although the company’s stock closed down 5% in the regular trading session, it surged more than 15% in after-hours trading.
As of press time, the share value was up 20% in Friday’s pre-market session.
Rivian shares hit a 2025 high of $22.69 on December 22, following autonomy-related updates.
The stock then lost 40% of its value, hitting a low of $13.57 per share exactly a week ago, as the lack of news around the upcoming R2 concerned investors.
The EV maker’s shares has shown some recovery as the first reviews of the model were published and as the company revealed that the pricing details and specs of the model will be announced on March 12.
UBS Take
To UBS analyst Joseph Spak, the potential risk/rewards on the stock are more “balanced” now than they were a month ago, when Rivian was trading around $5 higher.
“We believe the near-term risk/reward is more balanced at current levels as our prior rating was in part valuation based,” he wrote.
On January 14, Spak warned that the stock’s recent rally on artificial intelligence enthusiasm has created an unfavorable risk-reward setup.
“Ultimately, the Rivian investment case is about the company progressing to being a larger, and ultimately profitable, company,” he noted this Friday.
According to the analyst, UBS has been and will continue to be “excited about the product, the product pipeline and the brand.”
“We just had concerns that valuation had gotten ahead of itself,” he admitted.
2026 Guidance
The analyst flagged that the 2026 delivery guidance issued by Rivian “encapsulates some of the upside potential with downside risk.”
Rivian estimates deliveries to be between 62,000 and 67,000 units, as it begins deliveries of the R2 SUV in the second quarter.
The analyst said these estimates are “better than we feared,” highlighting that “if they are able to execute to that, it portends a solid exit rate by which one can imagine an even stronger 2027 and beyond.”
At the same time, the bank is concerned about this guidance, as it depends on a model that is only starting production.
Spak wrote that the “flip side is we struggle to see upside to 2026 guidance,” as the guidance implies deliveries of about 45,000 units in the second half, indicating “a strong ramp,” and deliveries of around 22,000 R2 vehicles.
“While we don’t doubt initial demand, that may require near flawless production execution,” he warned.
Spak had previously cautioned that expectations for Rivian‘s upcoming R2 midsize SUV may be too high.
“While we like the vehicle, expectations may be too high,” he wrote a month ago.
“Our 2026 and 2027 sales forecasts are 16% and 19% below consensus, and current stock prices imply 2027 sales approximately 25% above our estimate.”
The consensus between analysts is for Rivian to deliver 64,000 units in 2026.
EBITDA Losses
Another concern reiterated by Joseph Spak is Rivian‘s concerning burning cash rate.
He noted that the “company is still burning cash and we don’t see positive EBITDA for a number of years.”
Rivian disclosed a positive gross profit of $144 million by the end of 2025, achieving its first annual gross profit.
However, it still reported a net loss of about $3.6 billion last year — improving from the $4.7 billion net loss recorded in 2024.
The company has incurred in over $24 billion in cumulative losses.
In recent months, the company’s management has consistently emphasized that it has reduced production costs for the R2 by 50% compared with its R1 models.
It is counting on the new model to achieve profitability, as CEO RJ Scaringe told CNBC last week.
