Investor's Corner
Rivian’s initial stock coverage highlights the potential of the EV sector
Rivian (NASDAQ: RIVN) has received its first bit of initial stock coverage from several highlighted electric vehicle sector analysts. The potential for Rivian’s stock, according to the two analysts, indicates the widespread potential of the EV sector as a whole, regardless of the company. EV stocks are becoming one of the most highly-invested holdings available, driving valuations, and potential price targets for relatively unestablished companies through the roof, simply based on the astronomical potential each company holds to change the automotive industry and accelerate the adoption of EVs.
Both Dan Ives of Wedbush Securities and Adam Jonas of Morgan Stanley initiated coverage on Rivian stock within the past few days. Ives, who holds relatively bullish outlooks on several tech stocks, including one of the highest 12-month outlooks on Tesla (NASDAQ: TSLA) on the Street, is also relatively bullish on Rivian stock. Ives and Wedbush initiated coverage with a $130 price target and an “Overweight” rating on Rivian, stating that the company “is a stalwart EV startup focusing on redefining the sports utility vehicle with their innovative R1S and R1T models. Rivian is in the catbird’s seat around EV pickups and SUVs.”
Rivian is the first company in the automotive sector to launch an all-electric pickup, beating Tesla, GMC, and Ford. Tesla’s Cybertruck, GMC’s Hummer EV, and Ford’s F-150 Lightning are highly anticipated, but Rivian has the accolade of being the first to launch a pickup, which could put the automaker in prime position to command the electric pickup sector, as long as it can solve some of the shortcomings related to range degradation that have been reported previously. Additionally, Rivian is still working to solve production ramp issues in its Normal, Illinois factory. These issues are not uncommon for newly-established car companies. Building vehicles is hard, Elon Musk, CEO of Tesla, told Rivian and Lucid that ramping manufacturing is difficult.
On top of Ives coverage, Adam Jonas of Morgan Stanley launched Rivian coverage as well with an “Overweight” rating and a $147 price target. Jonas lists Rivian’s R1T pickup as a “compelling product” and believes the company could be the most well-suited to challenge Tesla for market domination. The R1T gives Jonas the impression that it is “the most capable/desirable product in the market.”
Interestingly, Jonas believes that Rivian’s partnership with Amazon could yield results that are much quicker than projected. Currently, the two companies have an agreement for Rivian to supply Amazon with 100,000 all-electric delivery trucks by 2030. Jonas said in a note to investors that the 100,000 figure is “a stale number” and believes around 300,000 units of Rivian’s all-electric delivery vehicle will make their way to Amazon by 2026.
Ives holds a 72% success rate and an average return of 34.8%. He is ranked 31st out of 7,727 analysts on TipRanks. Jonas holds a 57% success rate with an average return of 14.5%. He is ranked 465 out of 7,727 analysts on TipRanks.
Disclosure: Joey Klender is a TSLA Shareholder. He does not hold RIVN stock.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
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Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
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For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
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