Shares of electric vehicle (EV) maker Rivian (NASDAQ:RIVN) stock rose overnight after Piper Sandler upgraded the stock to “overweight” and raised its price target from $15 per share to $21.
Rivian was up 3% overnight and due to open at $11.04 per share today. But that came after a loss of 8.7% yesterday.
Why Buy Rivian Now?
Rivian has been struggling against heavy losses and a slowing market for EVs. But analyst Alexander Potter says Rivian got 68,000 deposits for the new R2 in the 24 hours after it was unveiled. He said that means demand remains strong.
“We think its sibling, the R3, could be one of the most compelling designs on the market when it is released,” he adds. Potter said the company’s decision to delay its Georgia plant and make the R2 in Illinois is also a positive.
Ratings for Rivian stock are currently all over the map. While most analysts at Tipranks still tell clients to buy it, sentiment at Stocktwits has turned negative. Over 17% of Rivian stock is being held short, according to Fintel. This includes almost half the stock held off listed exchanges.
The $45,000 R2 is considered a “make or break” product for Rivian. While reviews are strong, R2 won’t be available until 2026. Rivian must also prove it can make the car, and a profit, at the same time.
Even before that car hits the streets, Rivian must decide whether to build the Georgia plant, which would make the R3. Rivian said putting off the Georgia plant is saving it $2.5 billion.
The new plant comes with $15 billion in new financing bonds to be issued by county governments and the state of Georgia. The company also sold $1.5 billion of convertible bonds last year.
RIVN Stock: What Happens Next?
Professional analysts still support Rivian. But small investors are backing away. One side will be wrong.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
