Mizuho analyst Vijay Rakesh just raised his Rivian (NASDAQ:RIVN) stock price target to $15 from $11, although that still represents a discount from current prices. The analyst reiterated his “neutral” rating.
Rakesh noted that Rivian’s June deliveries of 13,790 vehicles surpassed the consensus analyst estimate for approximately 11,500 deliveries. At the same time, Rivian reiterated its 2024 delivery guidance for growth of low-single digits, which Rakesh believes is below the average analyst estimate for 6% growth. In 2023, Rivian produced 57,232 vehicles while delivering 50,122 of them. The company has guided for the production of 57,000 vehicles in 2024.
“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. Key is the recent VW up to $5B investment,” said Rakesh.
RIVN Stock: Mizuho Raises Price Target to $15
Rivian is not yet profitable, although the company is taking steps to change this. During Rivian’s Investor Day event, CEO RJ Scaringe called for a 20% reduction in material costs for its second-generation R1 platform and another 45% reduction for the R2 platform compared to the second-generation R1 platform.
“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,” said Chief Financial Officer Claire McDonough.
Meanwhile, Volkswagen’s (OTCMKTS:VWAGY) investment is a major boost for RIVN stock, improving its liquidity and balance sheet. The deal, announced last month, will see Volkswagen invest up to $5 billion into Rivian while also forming a vehicle software joint venture with the electric vehicle (EV) company.
Rakesh added that he is positive about Rivian’s upcoming R2 vehicle. The R2 starts at $45,000 with deliveries set to begin during the first half of 2026.
Rakesh is a highly rated analyst on TipRanks with 4.9 stars. He carries a success rate of 60% and an average one-year return of 21.50%.
Wall Street has an average RIVN stock price target of $18.09. The highest target is at $36 while the lowest is at $10.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
