Proactive Investors - Rivian Automotive Inc (NASDAQ:RIVN) has been upgraded from ‘Sell’ to ‘Neutral by UBS analysts on their belief the stock’s risk/reward profile is balanced in the near term.
They believe that the EV maker’s stock price, $8.40 at the time of writing, better considers some of their mid-term concerns.
“For instance, we believe the stock is now pricing in approximately $4.5 billion 2025 sales versus the UBS estimate of about $5.1 billion, even though the consensus still stands at $7.5 billion,” they wrote.
“With climbing short interest, now 18.7% of float, positioning is also a higher risk, especially if a positive data point or catalyst emerges.”
However, the analysts still expect the stock to remain volatile, with potential positive and negative catalysts ahead.
“Near-term upside catalysts could be if there is a positive update on R2 orders which would reinforce what Rivian can become, even if that growth is more likely in 2026 or 2027,” they wrote.
“Near-term downside catalysts could be R1 price cuts and/or softer R2 demand (even though we believe this is better considered at current levels, we see headline risk) as well as higher interest rate concerns.”
In a bull case, they see Rivian as one of the few surviving new EV entrants, considering its "compelling" product.
In the bear case scenario, investors are expecting to see cracks in R1 demand or pricing amid slower EV demand and greater affordability concerns. They also noted investor hesitance to buy shares ahead of a likely capital raise, increasing the “cost” of new capital.
The analysts have a $9 price target on Rivian. Shares traded hands at about $8.80 in the early afternoon on Wednesday.