One Wall Road analyst thinks Rivian Automotive (NASDAQ: RIVN) inventory has dropped far sufficient. UBS analyst Joseph Spak upgraded the inventory of the electrical automobile (EV) maker on Tuesday, and implied there could possibly be one other improve forward.
Spak addressed each a short-term view in addition to a particular catalyst that might drive Rivian shares increased over the long run. After Rivian inventory has dropped by greater than 50% within the final three months, Spak upgraded his score from promote to impartial on Tuesday. He saved his worth goal of $9, however famous that there could possibly be a brand new catalyst rising, too.
One catalyst that might drive this EV maker’s inventory
Within the quick time period, Spak famous, “We imagine the near-term danger/reward is extra balanced at present ranges” after the current slide in Rivian shares. He added that dangers that are actually mirrored within the inventory worth embody slowing EV gross sales progress typically. However the quick curiosity has additionally reached over 18% of accessible Rivian shares.
Any near-term catalyst might spark a brief squeeze that may push shares increased. And there’s a potential catalyst forward. Rivian lately launched the R2 SUV, its subsequent EV providing. The analyst believes {that a} optimistic preliminary replace on R2 reservations would help the longer-term potential for the inventory.
The R2 will not be out there till 2026, however the inventory might push increased on any replace that has buyers anticipating rising income within the coming years. With Rivian inventory buying and selling close to its all-time lows, a lot of the pessimism surrounding EV demand and slowing gross sales might already be priced into the inventory.
Buyers should not take a look at the short-term motion or whether or not quick protecting may push shares increased. But when the R2 platform, and even the longer term R3 crossover SUV that may observe, are successful with EV consumers, Rivian’s inventory might have bottomed. Dangers stay, in fact, however buyers who imagine EV demand will probably be sturdy for the decrease priced automobiles ought to contemplate shopping for Rivian inventory now.
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Howard Smith has positions in Rivian Automotive. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.
1 Wall Road Analyst Upgraded Rivian Inventory With a Potential Catalyst Forward. Is It a Purchase? was initially revealed by The Motley Idiot