The Rivian ratings deluge has begun. Investors should be happy.
Rivian Automotive (ticker: RIVN) achieved its first rating. This is a buy from Wedbush analyst Dan Ives. Its price target is $130, which is about 25% higher than Rivian’s close to trade on Friday.
Ives called Rivian an “EV giant in the making,” with the company looking to “launch strategically in an untapped market as SUV/pickup truck EVs are virtually non-existent in the EV market today.” Trucks and SUVs are very popular in the US, typically accounting for over 60% of total passenger vehicle sales.
This is the first rating, it is the first time for investors to see the projections. Ives plans to generate $3.6 billion in sales from approximately 45,000 vehicle deliveries in 2022 and $8.4 billion in 2023 from approximately 105,000 deliveries. The company is not expected to generate profit in any year.
Ive’s target price implies that Rivian stock should trade at about 15 times projected 2023 sales. Shares of EV leader, Tesla (TSLA), trade for about 11 times projected 2023 sales.
That’s a big, growth stock valuation, but Ives knows his way around growth stocks. He covers EVs and technology stocks like Salesforce.com (CRM). On the automotive side of his coverage list, Ives buys shares of both Tesla and General Motors (GM). His price target for Tesla stock is $1,400 per share. His price target for GM is $85 per share.
Buy ratings on GM, Tesla and now Rivian are based on Ives’ belief that EVs will become the dominant form of personal transportation in the coming years.
More Rivian ratings will follow – most likely to come on Monday. Wall Street brokers involved in an IPO have to wait 25 days for coverage to begin. Prohibition has now ended, including weekends.
Rivian investors would welcome some buy ratings. The stock is down from a November 16 high of about $180 per share. Rivian stock fell 6.7% last week, marking a tough week for growth stocks. The Russell 1000 Growth Index dropped 2.2%. The S&P 500 fell 1.2% for the week and the Dow Jones Industrial Average fell 0.9%.
Write to Al Root at [email protected]