Rivian's Stock Gain Higher As EV Sales Ramp Up, Analyst Says

Shares of Rivian Automotive Inc. experienced gains on Wednesday as Mizuho analyst Vijay Rakesh expressed a more bullish outlook for the electric-vehicle maker. Rakesh cited the potential for Rivian to surpass its full-year delivery target, attributing it to the continued strong sales momentum in the electric vehicle (EV) market.

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While reiterating his buy rating on Rivian's stock (RIVN), Rakesh raised his price target by 11%, from $27 to $30. As a result of this positive assessment, the EV maker's stock climbed 4.4% during morning trading. The stock had previously risen 2.9% on Tuesday, breaking a three-session losing streak, but its gains tapered off during the day, closing Wednesday's trading session with less than 1% growth.

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The stock has seen a remarkable rise of 54.7% in July, setting it on course for its most significant one-month gain since its IPO in November 2021. The previous record monthly gain, based on closing prices, was 33.3% in July 2022.

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Rakesh praised Rivian's execution in its production ramps, citing the strong second-quarter deliveries report as evidence. He also noted the overall industry's positive trajectory in EV sales, which he believes could enable Rivian to surpass its estimated 50,000 deliveries for 2023.

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Despite potential headwinds from a stretched consumer and high-interest rates, Rakesh expects robust sales momentum in the auto industry, particularly for EVs.

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With the new $30 price target, Rakesh is tied with two other analysts for the second-highest among the 24 analysts surveyed by FactSet who cover Rivian. The most bullish analyst, George Gianarikas from Canaccord Genuity, holds a $40 target, according to Trade Algo.

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On a separate note, Rakesh increased his stock price target for General Motors Co. (GM) to $40 from $30, but maintained a neutral rating on the automaker. While recognizing GM as a growing player in the EV space, Rakesh pointed out potential margin headwinds in its transition from internal combustion engine (ICE) vehicles to EVs.

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Over the past three months, Rivian's stock has surged by 101.0%, while GM shares have gained 14.8%. The Global X Autonomous and Electric Vehicles exchange-traded fund (DRIV) increased by 38.7% during the same period, while the S&P 500 index (SPX) recorded a growth of 10.1%.

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