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Rivian Automotive (NASDAQ:RIVN) The company impressed investors by unveiling second- and third-generation electric vehicles (EVs) at an event earlier this month. The stock price briefly rebounded following this announcement, but has since lost momentum and is still down more than 50% as of 2024.
But today, Piper Sandler analyst Alexander Potter upgraded his rating on Rivian stock to buy from his previous recommendation of hold. He also raised his price target to $21 per share from $15. The stock soared on Friday as the new price target implies a nearly 100% share price increase.
Rivian’s secret weapon
Rivian’s second-generation electric vehicle will be a midsize SUV that costs about $30,000 less than the full-size Rivian R1S. A base price of $45,000 should attract more potential customers. Shipping is expected to begin in early 2026.
But analysts also noted a major turning point that will help the company preserve much-needed cash. The R2 will be produced at the company’s existing Illinois plant, rather than at the Georgia facility currently under construction. Delaying spending on its construction projects would save Rivian more than $2 billion.
Rivian has a unique vehicle lineup among EV startups. The company’s electric delivery vans may be an even more compelling reason to buy Rivian stock now. You have existing customers while growing your consumer business. Amazon and other commercial buyers of their delivery vans.
Rivian still needs the new R2 platform to hit customers. But more than $2 billion in capital savings should help extend the time to success. Piper Sandler analyst Potter believes the stock has bottomed out, and as the delivery van business continues to generate cash, he thinks investors should follow his advice and buy the stock. Maybe.
Should you invest $1,000 in Rivian Automotive right now?
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Howard Smith has positions in Amazon and Rivian Automotive. The Motley Fool owns a position in and recommends Amazon. The Motley Fool has a disclosure policy.
Is Rivian stock a buy after today’s analyst upgrade? Originally published by The Motley Fool
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