Rivian (RIVN) stock is on the move higher today with a new bull joining the herd.
Stifel initiated coverage of the electric adventure vehicle maker with a Buy rating and a $23 price target. The investment bank sees better pricing, strong demand for its vehicles, and margin expansion in the year ahead as positive catalysts.
Stifel analyst Stephen Gengaro wrote that bullish factors include the “high-quality” R1 vehicles driving brand awareness; Amazon’s prior order of 100,000 EDVs, and the opening of EDV purchase from other commercial fleets; the upcoming new R2 platform that could strongly compete with Tesla’s Model Y; and margin expansion including new technology like Rivian’s in-house Enduro motors and new battery pack, along with better pricing and supplier agreements, among other factors.
A 2023 R1T pickup truck is charged in a bay at a Rivian delivery and service center Wednesday, Feb. 8, 2023, in Denver. (AP Photo/David Zalubowski) (ASSOCIATED PRESS)
That being said, Gengaro notes headwinds like the current macro environment, high rates, and cash burn. Nonetheless the Gengaro and the Stifel team are bullish on EVs in general.
“Electric vehicle sales have faced stiff headwinds recently, driven by both macroeconomic factors (high interest rates, inflation, and recessionary worries) as well as EV specific headwinds including range anxiety, vehicle costs, model availability, and charging infrastructure. We believe these EV hurdles will shrink over the next few years, paving the way for sales growth,” Gengaro wrote in his note.
Stifel’s note comes on the heels of positive news in recent months from Rivian. The automaker reported third quarter results that beat expectations last month, and boosted its full-year production forecast to 54,000 from 52,000 units. Its prior forecast of 52,000 units was lifted earlier in the year from 50,000.
Rivian also narrowed its full-year adjusted EBITDA loss to $4.0 billion from $4.2 billion and revealed that its 2023 capex (capital expenditure) guidance was reduced to $1.1 billion.
This has powered the stock higher to…
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