Rivian Stock Offers a ‘Good Entry Point,’ Says 5-Star Analyst

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For EV start-up Rivian (RIVN), 2022 has brought with it mainly headaches and headwinds, and the supply-chain snags have resulted in the company lowering its production expectations for the year.

However, on the earnings call earlier in May, the company sounded upbeat about meeting its production targets, and following a recent chat with the company’s CFO, Mizuho analyst Vijay Rakesh sees enough reasons to stay upbeat.

For one, despite the departure of executive vice president of manufacturing engineering Charly Mwangi, the arrival of new COO Frank Klein amidst the restructuring of the business (the company is splitting the commercial business which manufactures the Amazon delivery van from its retail business, which makes the R1T and R1S) is a good one. “We believe the reorganization ahead of COO Klein starting June 1st could point to potentially more accountable and better execution ahead,” the 5-star analyst opined.

Klein certainly has the credentials to help the turnaround, having been President of Magna Steyr and spent ~25 years at Daimler in roles including plant manager (Kecskemét, Hungary) and head of Mercedes-Benz Vans operations.

Going by the noises made by the company, R1/EDV production lines for NON-chip parts are “ramping well,” with chassis production lines, battery modules, and inverter/powertrain production/supply all in a healthy state. However, there have been some limitations due to “specific” commodity chip shortages, although the company is in talks with suppliers to solve the matter. “With supply key,” says Rakesh, “we believe RIVN looks to phase in a second shift, by increasing first-shift hours and adding a second shift to slowly ramp from couple days to full week.”

With seats now shipping for the Amazon EDV (electric delivery van) – Rivian has been embroiled in a dispute with Commercial Vehicle Group over car seat pricing – the company still expects a third of the 25,000 units produced in C22E will be Amazon EDV vans, (around 8,000 units).

So, promising for Rivian, but what does it all mean for investors? Rakesh thinks the current share price offers a “good entry point.” He reiterated a Buy rating on the stock along with an $80 price target, which implies ~155% upside from current levels. (To watch Rakesh’s track record, click here)

Overall, RIVN has 15 recent analyst reviews, breaking down to 9 Buys and 6 Holds, making the analyst consensus rating on the stock a Moderate Buy. Meanwhile, the average price target of $51.46 implies an upside potential of ~64% for the coming year. (See Rivian stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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