Rivian Automotive (NASDAQ: RIVN) stock jumped during intraday trading Friday after Mizuho analyst lifted its price target.
Vijay Rakesh, an analyst at Mizuho, has revised his price target for Rivian (NASDAQ: RIVN) stock from $11 to $15, maintaining a “neutral” rating. Despite the increase, this target still reflects a discount from Rivian’s current market prices.
Rakesh noted that Rivian’s June deliveries of 13,790 vehicles beat the consensus analyst estimate of about 11,500 deliveries. However, he pointed out that Rivian’s 2024 delivery guidance, indicating low single-digit growth, falls short of the average analyst expectation of 6% growth. In 2023, Rivian produced 57,232 vehicles and delivered 50,122, with plans to produce 57,000 vehicles in 2024.
Rakesh said,
“We would note the recent RIVN Investor Day focus on ~20% material cost reductions on R1 by the DecQ, with positive GMs exiting the year. The key is the recent VW up to $5B investment.”
Mizuho Analyst Raises Price Target For Rivian
Rivian is not yet profitable, but the company is taking vital steps to turn itself into a profitable entity. During Rivian’s Investor Day event, CEO RJ Scaringe called for a 20% reduction in material costs for its second-generation R1 platform and a further 45% reduction for the R2 platform compared to the second-generation R1 platform.
Chief Financial Officer Claire McDonough said,
“By the fourth quarter of this year, we expect to see gross profit by driving down material cost, reducing our fixed costs, and increasing our revenue per unit.”
Meanwhile, Volkswagen’s (OTCMKTS: VWAGY) investment represents a significant uplift for RIVN stock, improving its liquidity and balance sheet. The deal, announced last month, will see Volkswagen invest up to $5 billion into Rivian and form a vehicle software joint venture with the electric vehicle (EV) company. This investment will improve the liquidity and balance sheet of Rivian.
Rakesh also expressed optimism regarding Rivian’s upcoming R2 vehicle, priced at $45,000, with deliveries scheduled to commence in the first half of 2026.
Wall Street analysts have an average price target of $18.09 for Rivian stock, with the highest target at $36 and the lowest at $10.
Rivian (NASDAQ: RIVN) Stock Reaction
RIVN stock surged 8.05% on Friday, closing at $18.11, marking a 22.45% increase for the week. The trading volume was 97,340,592 shares, significantly higher than the average daily volume of 46.35 million.
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