Rivian Stock Jumps After Benchmark’s ‘Buy’ Rating, 38% Upside View: Retail Holds Back Optimism

Shares of Rivian Automotive, Inc. climbed over 4% in pre-market trading Monday, poised for a fifth consecutive session of gains and over 2-month highs. 

The stock moved higher after Benchmark Securities initiated coverage with a ‘Buy’ rating and an $18 price target, implying a 38% upside from its last close.

The brokerage cited Rivian’s potential to capture a significant share of a “massive market opportunity” over the next decade. 

It highlighted expectations for improved domestic EV production starting in 2025, driven by declining average selling prices and expanded charging infrastructure. 

Rivian stands out among EV startups with its Amazon and Volkswagen contracts, highly rated vehicles, and expected positive gross profit in the fourth quarter (Q4) of 2024, according to the brokerage. 

Benchmark also pointed to Rivian’s solid financial liquidity as a differentiator in the competitive EV space.

RIVN sentiment and message volume Dec 9 premarket as of 8:45 am ET | source: Stocktwits

On Stocktwits, retail sentiment was mixed, hovering at ‘neutral’ levels, albeit better than a ‘bearish’ score a day earlier. 

While some retail traders expressed optimism about Rivian’s long-term profitability, others remained skeptical. 

Bullish comments highlighted the company’s potential to outperform shorts once it achieves profitability, with some predicting a price of $20 by year-end. 

On the bearish side, critics questioned Rivian’s long-term viability, predicting further price declines and speculating that the company might be acquired in the next few years.

Last month, Rivian received preliminary approval for a $6.6 billion federal loan to support the construction of a delayed electric-vehicle factory. 

CEO R.J. Scaringe noted the funds would allow Rivian to scale production of lower-cost electric SUVs. 

The company also expects to achieve positive gross profit this quarter, aided by a surge in regulatory credit sales projected to total $300 million this year, of which $275 million is anticipated in the fourth quarter alone.

However, challenges remain. Rivian reported widening losses of over $39,000 per vehicle delivered in the third quarter, compared to $32,705 in Q2. 

It projects a negative adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.88 billion for 2024, slightly worse than analyst expectations. 

Rivian’s stock has lost more than 44% year-to-date, reflecting broader struggles to scale production and meet investor expectations.

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