Written by Cláudio Afonso | Info@claudio-afonso.com | LinkedIn | X
Needham analyst Chris Pierce reiterated on Wednesday the firm’s Buy rating and $13 price target on Rivian shares, citing confidence in the company’s prospects amidst the global transition from internal combustion engines (ICE) to electric vehicles (EVs).
The EV maker reported on Tuesday its financial results from the first quarter of 2024 posting wider than expected losses. Rivian reiterated its annual production guidance of 57,000 vehicles for 2024 and the goal of reaching positive gross margins by the last quarter of the year.
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Needham analyst said the firm continues to believe that Rivian “will be a winner in the ICE to EV transition given consistent evidence of the vehicles resonating well with end users”.
“We reiterate our Buy rating on RIVN and maintain our price target of $13 post 1Q results and company commentary,” the analyst wrote in a new research note.
However, Pierce recognises the short term concerns on demand of EVs as brand awareness remains a focus.
“We continue to believe that Rivian will be a winner in the ICE to EV transition given consistent evidence of the Rivian vehicles resonating well with end users, but near term R1 demand concerns and broader EV adoption trends continue to be an overhang. Rivian reiterated guidance of positive gross margins in Q4 after successfully upgrading their R1 production line, increasing productivity, and lowering per vehicle costs on upgraded technology and more favorable supplier agreements,” Pierce added.
“Growing brand awareness remains a focus, through increased R1 test drives and the unveil of their R2 and R3 vehicles. Our $13 price target represents 15x our ’28E adj EBITDA estimate discounted back, or 1x our ’25E revenue estimate,” he concluded.
During the conference call, Morgan Stanley analyst Adam Jonas asked Rivian‘s CEO RJ Scaringe regarding a DigiTimes report suggesting Apple’s interest in collaborating with a US EV startup, with Rivian being singled out as a “very likely candidate”.
The chief executive said Rivian “doesn’t comment on market rumors” adding later that the company’s in-vehicle technology gives the automaker “a lot of customer facing strength” while it creates “opportunities for partnership certainly”.
Rivian received lsat week a $827M incentive package from the State of Illinois allowing the expansion of its plant in Normal.
Written by Cláudio Afonso | Info@claudio-afonso.com | LinkedIn | X
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