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Needham Just Raised Its Price Target on Rivian (RIVN) Stock

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Rivian (NASDAQ:RIVN) stock should trade at $20, according to Needham analyst Chris Pierce. The analyst raised his price target from $13 while reiterating a “buy” rating after Rivian’s 2024 Investor Day event yesterday.

During the event, Rivian reiterated its 2024 production guidance for 57,000 vehicles and the fact that it expects a positive gross profit per vehicle during the fourth quarter through cost reductions. Rivian produced 57,232 vehicles last year.

Additionally, Rivian guided for Q2 production of between 13,000 and 13,300 vehicles. That came on top of the analyst estimate for 12,000 vehicles. Rivian will report its Q2 production and deliveries on July 2.

The electric vehicle (EV) company also provided several long-term goals, such as a gross margin in the 25% range and an adjusted profit margin in the “high teens.” A timeline for these targets was not provided.

“Everything that you’re hearing from us, around our product, around how we’re running the business, around how we’re driving toward profitability, my hope is that you’re seeing really an extreme sense of urgency,” said CEO RJ Scaringe.

RIVN Stock: Needham Raises Price Target to $20

Pierce is impressed with Rivian’s cost-savings measures and pointed out that its up to $5 billion partnership with Volkswagen (OTCMKTS:VWAGY) signals the legacy automaker’s stamp of approval for its software.

“We see RIVN as a long-term winner in the eventual ICE to EV transition, leaning on its ability to create a brand and produce vehicles that drive high levels of customer passion and satisfaction,” wrote the analyst.

Pierce’s $20 price target is based on a 20x multiple of expected adjusted 2028 EBITDA. Pierce previously used a 15x multiple to value the company.

Needham wasn’t the only firm to adjust its price target following Rivian’s Investor Day. DA Davidson analyst Michael Shilsky upped his target by $1 to $13 while maintaining a “neutral” rating. Shilsky still has concerns about Rivian but admitted that “it’s difficult to deny the appeal of the roadmap from here” based on the upcoming R2 and R3 releases. His price target is based on a 1.5x multiple of expected 2025 EV/Sales.

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 Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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