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Needham has just raised its price target for Rivian (RIVN) stock

RIVN Stock – Needham just raised its price target for Rivian (RIVN) stock

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Rivian (NASDAQ:RIVN) shares should trade at $20, according to Needham analyst Chris Pierce. The analyst raised his price target from $13 and reiterated a buy rating following Rivian’s 2024 Investor Day event yesterday.

During the event, Rivian reiterated its 2024 production forecast of 57,000 vehicles and the fact that it expects to achieve positive gross profit per vehicle in the fourth quarter due to cost reductions. Last year, Rivian produced 57,232 vehicles.

In addition, Rivian forecast second-quarter production of between 13,000 and 13,300 vehicles, above analyst estimates of 12,000 vehicles. Rivian will announce its second-quarter production and deliveries on July 2.

The electric vehicle (EV) also outlined several long-term goals, such as a gross margin in the 25% range and an adjusted profit margin in the “high teens.” A timeline for those goals was not provided.

“Everything you hear from us – about our product, about how we run the business, about how we pursue profitability – I hope you see an extreme sense of urgency in it,” said CEO RJ Scaringe.

RIVN share: Needham raises price target to USD 20

Pierce is impressed by Rivian’s cost-cutting measures and pointed out that its up to $5 billion partnership with Volkswagen (OTCQB:VWAG) signals to the established automobile manufacturer its approval of its software.

“We see RIVN as a long-term winner in the eventual transition from internal combustion engines to electric vehicles because the company can build on its ability to build a brand and produce vehicles that generate great excitement and satisfaction among customers,” the analyst wrote.

Pierce’s $20 price target is based on 20 times expected 2028 adjusted EBITDA. Pierce had previously used 15 times to value the company.

Needham wasn’t the only one to adjust its price target following Rivian’s investor day. DA Davidson analyst Michael Shilsky raised his target by $1 to $13 but maintained his “neutral” rating. Shilsky still has concerns about Rivian, but admitted that “it’s hard to deny the attractiveness of the roadmap from here” based on the upcoming R2 and R3 releases. His price target is based on 1.5x expected 2025 EV/sales.

At the time of publication, Eddie Pan did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing guidelines.

Eddie Pan specializes in institutional investing and insider activity. He writes for InvestorPlace’s Today’s Market team, which focuses on the latest news on popular stocks.

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