The true importance of a key meeting often becomes clear only in hindsight, like Washington meeting Hamilton, Nixon meeting Mao, or Harry meeting Sally.
All these are examples highlighted by Canaccord analyst George Gianarikas, who thinks a more recent hook up deserves a place on that illustrious list. “We do not think it’s overstating the case to describe Rivian’s (RIVN) VW partnership as monumental,” the analyst said. “An underappreciated game-changer of a transaction.”
To reflect this take and off the back of the EV maker’s recent Analyst Day, Gianarikas has raised his price target for RIVN shares from $20 to a Street-high of $30, suggesting the stock will now post growth of 115.5% over the coming year. Gianarikas’ rating stays a Buy. (To watch Gianarikas’ track record, click here)
Gianarikas thinks it’s time to “redfine” what Rivian is and isn’t.
On the latter, it is definitely not “one of the EV walking dead.” The market has been saturated with EV startups failing to deliver but Gianarikas believes Rivian now probably has the capital to “push through, shake off operational cobwebs, and breathe life into its mass market lineup — the R2/R3; and achieve scale.” Additionally, as the VW deal has shown, with its focus on Rivian’s tech, it is also “not just an auto OEM.”
So, what is Rivian? Well, that is still in the making, the more pertinent question is what can it become?
While there’s still much to prove on the operational side, it is on its way to becoming a “high-volume manufacturer.” They company definitely has the products to achieve that goal. “The R2 and R3 are very compelling,” says the analyst. “They have the right price points. They are beautiful. We spent more time with them at the analyst day and the look and feel are fantastic.”
Once these vehicles hit the market and are mass-produced, Gianarikas thinks they will have a significant impact. They will also compete in a segment currently dominated by Tesla, giving consumers another option for an “affordable, compelling EV for the masses.”
Rivian is also set to become is a “profitable enterprise.” The company has set its sights on becoming gross margin positive in Q4. “We think they’ll get there,” Gianarikas summed up, “management made a compelling case at the analyst day, and we wait with bated breath.”
So, that’s the bullish Canaccord view, how does the rest of the Street feel about Rivian? Based on an additional 11 Buys, 8 Holds and 2 Sells, the analyst consensus rates the stock a Moderate Buy. The average target stands at $16.85, implying shares will climb 21% higher in the year ahead. (See Rivian stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
