Shares of the electric- truck start-up
Rivian Automotive
have enjoyed some positive momentum lately. Two signs that the ride isn’t over is that the shares caught an upgrade just ahead of the company’s third-quarter delivery report, which turned out to be better than expected.
Monday, Evercore ISI analyst Chris McNally upgraded Rivian stock (ticker: RIVN) to Buy From Hold. His price target is $35, up from $30. Details weren’t available to Barron’s; the broker didn’t respond to a request for a copy of the report.
That news came just before the company disclosed its third-quarter sales and production numbers.
Rivian delivered 15,564 units in the third quarter, compared with Wall Street projections for about 14,000, according to FactSet. The company delivered 12,640 cars in the second quarter and 7,946 in the first for a first-half total of 20,586 units.
Rivian produced 16,304 units in the third quarter, while first-half production totaled 23,387 units. In August, management said it expected to make about 52,000 vehicles in 2023, up from a forecast given in May for about 50,000 units. Rivian has about 12,000 left to make to hit the updated call.
“Rivian has now improved weekly production rates in seven out of the last eight quarters,” wrote Canaccord analyst George Gianarikas in a Monday report. “We continue to believe Rivian is on its way to capturing its fair share of the EV market over time through a sound, thorough, vertically integrated strategy that should lead to a desirable customer experience and strong profitability over time.”
He rates shares Buy and has a $44 price target for Rivian stock.
With the upgrade, about 64% of analysts covering Rivian stock have Buy ratings, according to FactSet, and the average price target is $29. The average Buy-rating ratio for stocks in the
S&P 500
is about 55%.
Rivian stock rose more than 3% in premarket trading but then slipped back for a loss of about 2.8% to $23.60. The
S&P 500
was down about 0.2% and the
Nasdaq Composite
was up about 0.4%.
Profit-taking might be one reason why the stock was down despite two pieces of good news. Coming into Monday trading, Rivian stock had risen about 40% so far this year as investors welcomed news that production is improving.
Over the past 12 months, shares are down about 24%. Rising interest rates have reduced investors’ enthusiasm for shares of start-up companies that don’t generate profits.
Write to Al Root at [email protected]
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