Shares of Rivian Automotive, Inc. (NASDAQ: RIVN) have surged in pre-market trading Wednesday following a favorable coverage update by Baird Equity Research, which labeled the company as a “bullish Fresh Pick.”
Baird Equity Research reaffirmed its coverage of Rivian with an Outperform rating and set a price target of $30. The research firm anticipates that Rivian will beat expectations in third-quarter deliveries, viewing this development as a potential short-term catalyst for the stock.
The report also highlights the significant improvement in Rivian Automotive’s profit margins and recent commentary from the company’s management affirming robust consumer demand, particularly for the R1S model.
Baird speculated that Rivian’s newly opened showrooms in Chicago and Brooklyn would serve as platforms for showcasing its R1 products. The research also suggested that Rivian might unveil details about its R2 platform in the first half of 2024.
Earlier this month, Claire McDonough, the Chief Financial Officer of Rivian, expressed optimism that the U.S.-based electric vehicle manufacturer would benefit from a significant drop in battery material prices later this year and in 2024. McDonough made these remarks at a Goldman Sachs conference, noting that the fall in commodity prices could potentially boost margins for Rivian and its industry peers, who have grappled with high costs and dwindling cash reserves.
Moreover, Rivian is ramping up the production of its in-house drive unit. This move promises to reduce dependence on third-party suppliers, drive down costs, and boost overall production efficiency.
Rivian Automotive, Inc. (NASDAQ: RIVN) stock increased 1.75% to $22.65 in pre-market trading Wednesday.