A quiet period for research on Rivian from brokerages involved in the IPO has ended.
Courtesy Rivian
Stock ratings for Rivian Automotive have arrived. Despite a high valuation on the electric-vehicle trucking startup, Wall Street is upbeat about its prospects and believe Rivian is a long-term EV winner.
The 25-day quiet period brokers working on an initial public offering observe before publishing research is over. Now, as of Monday morning, 12 analysts have new Rivian (ticker: RIVN) ratings. Eight rate shares Buy. Four rate shares Hold.
Rivian stock isn’t reacting positively to the new Buys just yet. Shares were down about 3.6% in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were up 0.2% and 0.6%, respectively.
Rivian’s early Buy-rating ratio is 67%. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. What’s more, the Buy-rating ratio for Tesla (TSLA) is only 48%. Wall Street prefers Rivian stock over shares of the EV leader.
J.P. Morgan analyst Ryan Brinkman is one of the analysts that prefer Rivian.
Brinkman rates Rivian shares at Hold. His price target is $104. That isn’t a very bullish rating, but his price target values Rivian stock at roughly $100 billion. Brinkman, however, rates Tesla shares Sell and has a $250 price target for that stock. Brinkman’s Tesla price target implies Tesla stock is worth about $250 billion. That’s two-and-a-half times more than Rivian, but Tesla is profitable and expected to generate about $70 billion in sales in 2022. Rivian is expected to generate less than $4 billion in sales in 2022.
Still, Brinkman projects Rivian sales will top $55 billion by 2030. “Rivian’s caliber as an organization is made clear when considering it beat Tesla, Ford , and GM to market with the industry’s first battery electric pickup truck (and an excellent one at that),” added the analyst in his report.
One of the new Buy ratings comes from Baird. “Clark Kent races to catch Iron Man,” wrote Baird analyst George Gianarikas in his launch report. That refers to both Rivian CEO R.J. Scaringe, who has black-rimmed glasses, making him look a little like the mild-mannered reporter, and Tesla CEO Elon Musk, who has been likened in the past to a real-life Tony Stark, or Iron Man.
“Rivian has an opportunity to formidably challenge Tesla’s market dominance,” added Gianarikas. “The company has adopted a promising, vertically integrated approach, reinforced by its robust balance sheet, Amazon partnership, and strong recruitment.” Rivian is manufacturing its trucks and SUVs at its new plant. What’s more, Amazon.com (AMZN) is a Rivian backer and has ordered 100,000 of the company’s electric delivery vans.
Baird is also positive on Tesla stock, rating shares at Buy. Baird’s Tesla price target is $888 a share.
Gianarikas’ price target is the second-highest on Wall Street. RBC analyst Joseph Spak, rates Rivian shares at Buy, has the highest call, at $165.
“Rivian has category defining vehicles with a focus on the key truck segment that should allow for 50% [average annual revenue growth] through end-of-decade,” wrote Spak in his coverage-launch report. “A clean-sheet approach and strong tech will allow [the company] to eventually use the vehicle as a platform for higher-margin software and services.”
Spak projects $3.4 billion in 2022 sales for Rivian. His 2030 sales projection is $86 billion. And while he rates Rivian Buy, Spak rates Tesla shares at Hold, though he took his Tesla price target to $950 a share from $800 on Monday. The stock closed at a bit less than $1,015 on Friday.
Morgan Stanley analyst Adam Jonas is one of the analysts bullish on both Rivian and Tesla stock. Jonas rates Tesla shares Buy and has a $1,200 price target for that stock. He launched coverage of Rivian shares with a Buy and $147 price target.
A few more ratings should come out over the next few day—or next few hours—but Wall Street’s initial view is clear: They like Rivian stock. The average analyst price target currently sits at about $132 a share, roughly 25% above where shares closed on Friday.
Write to Al Root at [email protected]
