Analysts at Wedbush believe Rivian Automotive Inc (NASDAQ:RIVN)’s story is finally turning around, maintaining their ‘Outperform’ rating and raising their price target on the stock from US$25 to US$30.
And it appears investors are also sold on the American electric vehicle (EV) manufacturer’s potential with shares of Rivian up 15.3% at US$24.93 on Friday afternoon.
The stock is up 43.7% in the year to date.
In a note to clients, the Wedbush analysts wrote that after a number of “one step forward, two steps back” excuses and supply chain headaches, the company was finally making a major turn towards executing its longer-term business model.
“We continue to strongly believe in the Rivian long-term story and view a number of positive catalysts ahead along with firming demand and production making this a table pounder at current levels,” they wrote.
“Demand remains firm for the company's unique EV model lineup while production appears to now be on the road to success as seen with stronger deliveries in 2Q.”
Rivian reported 2Q production of 13,992 vehicles and the delivery of 12,640 vehicles, well above the Street’s expectation of about 11,000, the analysts noted.
They said their raised price target reflected further confidence in Rivian hitting or exceeding its delivery targets heading into the second half of 2023 and 2024 with an inflection year ahead.
Wedbush’s analysts also pointed out that Rivian’s partnership with Amazon was on track with its first deliveries out in Europe ahead of schedule.
Amazon.com Inc (NASDAQ:AMZN) announced earlier this week that it has received the first of its new custom EV delivery vans from Rivian, with more than 300 vans to commence delivery operations in Germany in the coming weeks.
“We believe this was a great first step not only showing a small testament to Rivian finally stepping up to the plate and harnessing its production situation but also establishing a presence in Europe following its Mercedes fallout as demand for EV last-mile delivery vehicles is quickly rising with the global electric van market poised to be worth about $22.2 billion, representing a 30% compound annual growth rate,” the analysts wrote.
“The Street saw some further proof that the long-awaited Rivian success story may just be on its way and we believe more good news is on the horizon as we look into the next 12 to 18 months with Rivian.”
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