Rivian Stock Ratings Should Arrive This Week. What to Know.

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Courtesy Rivian

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It’s been a wild ride for Rivian Automotive investors since the electric vehicle maker went public last month. The situation could be even more dire.

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Analyst ratings are expected for the company this week—and if history is a guide, several new ratings should help the stock.

But Rivian (ticker: RIVN) isn’t sick at all. The company is valued at about $100 billion, more than Ford Motor (F) or General Motors (GM). Still, its shares are down about $2 from where they opened for trading on November 10. Rivian bought shares when it started the Nasdaq, even though the stock is still well above its IPO price of $78.

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Counting down to its IPO day, Rivian experienced an incredible five-day win, during which its stock peaked at $170.47. But shares closed down 5.5% on Friday at $104.67 per share, while many other highly valued stocks slipped. The Nasdaq Composite and S&P 500 fell 1.9% and 0.8%, respectively.

While it may sound strange, Rivian stock could use a boost — and Wall Street could oblige. Brokers involved in an IPO have to wait about 25 days to begin coverage of a stock, and they are usually optimistic once a business goes public.

Take Uber Technologies (UBER): The ride-hailing company sold shares to the public on May 10, 2019. Seventeen Brokers started coverage on June 4, 2019. Of those brokers, only one was launched with a hold rating – the rest were left. At the time, the average analyst target price for Uber stock was about $56. But the shares traded at around $43, less than Uber’s IPO price of $45. Meanwhile, Rivian stock is still up 34% from its IPO price.

It’s also worth taking a look at two EV producers, XPeng (XPEV) and Li Auto (LI). When two Chinese companies sold shares to the American public last year, analysts took a positive view, even though coverage took some time to build up.

Lee Auto’s IPO was the first: the company sold shares for $11.50 each on July 30, 2020. Only a few analysts began covering the company in late August of that year, after the quiet period ended. They all gave buy ratings, estimating an average price target of $21 per share. Lee stock was trading at around $17 at the time.

XPeng’s IPO took place on August 27, 2020, when the company sold shares for $15 per piece. Just one analyst began coverage on JP Morgan’s Nick Lai on September 21, 2020: He gave XPeng stock a buy rating and a $27 price target. XPeng stock was trading at around $18 at the time.

It’s still no one’s guess where analysts will land on Rivian. It’s valued massively — but so was Uber, which publicly had a market capitalization of about $70 billion. At the time of Uber’s IPO, GM was worth about $54 billion, while Tesla (TSLA) was worth less than $45 billion.,

For Tesla’s 2010 IPO, the company sold shares at a split-adjusted $3.40 each. Just one analyst, Patrick Archambault of Goldman Sachs, rated Tesla after a quiet period as the stock wrapped up. He gave it a hold rating and a $4.20 price target.

That was a long time ago, and EVs are far more popular now. For Rivian, it wouldn’t be surprising to see a higher buy rating than hold—and very surprising sell rating.

Write to Al Root at [email protected]

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