By Michael Elkins
Barclays initiated coverage of Rivian (NASDAQ:RIVN) with an Overweight rating and a $28 Price Target as analysts believe that the electric automaker is positioned to take solid share in the inflecting North American EV market.
The analysts wrote in a note, "We are hard pressed to see any company in the auto landscape as the "next Tesla," as Tesla has been quite unique in its accomplishments. That said, if we were to identify any of the start-up EV automakers as the closest to Tesla (vis-à-vis defining characteristics), we believe it would be RIVN. RIVN thus far has established key moats in product and technology."
Barclays believes that RIVN's software focus and underlying architecture make it well-positioned to capitalize on the monetization of new features and over-the-air updates over the life of its vehicles. Moreover, RIVN's vertical integration/ownership of key technologies can help to further distinguish its products.
In the near term, RIVN stock will likely be dictated by the margin and volume ramps of its Normal, IL plant, particularly the R1 vehicles. In the mid-term, RIVN must complete its Georgia facility in order to scale production more widely. Once it does so, it can launch the R2, which will drive volume inflection. Levy sees RIVN's volume ramp taking it to ~725k units by 2030.
Shares of RIVN are down 0.82% in pre-market trading on Wednesday.