Rivian’s stock price surged 11.2% on Monday after investment bank Benchmark initiated coverage with a Buy rating and set a bullish $18 price target. The move comes as the company navigates production issues, loss projections, and partnership announcements.
Benchmark analyst Mickey Legg believes Rivian is poised to capitalize on a growing EV market, with penetration expected to increase by 27% annually by 2035. Key partnerships, including its deal with Amazon and Volkswagen, have validated Rivian’s ability to manufacture EVs domestically and leverage in-house software.
Legg notes that Rivian has made significant cost-cutting efforts, reducing its bill of materials costs by 41% sequentially in Q2. The company expects a modest gross profit in Q4, consistent with these cost reductions. Additionally, the partnership with Volkswagen is seen as a key driver of growth, providing a cash runway for Rivian to invest in manufacturing and capabilities.
Rivian’s strong balance sheet, with over $6 billion in capital, also supports Legg’s positive outlook. The analyst estimates that Rivian has sufficient capital to reach “cash flow breakeven status” in its operations. With these factors in mind, Benchmark’s Buy rating and price target suggest a promising future for Rivian’s stock.
Source: https://finance.yahoo.com/news/rivian-stock-jumps-to-highest-since-august-as-benchmark-initiates-at-buy-214800596.html