Investor's Corner

Rivian’s initial stock coverage highlights the potential of the EV sector

(Credit: Rivian)

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 a modern dose of Chicken Soup for the Soul

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.

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Rivian’s initial stock coverage highlights the potential of the EV sector
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