© Reuters Rivian (RIVN) shares rise after Jefferies initiates coverage with Buy
Jefferies equity analysts initiated research coverage on Rivian (NASDAQ:) with a Buy rating and a $16.00 price target.
“In our view, Rivian is closest in spirit to Tesla, with its unique software stack, strong brand identity, global potential, and similar growing pains,” the analysts wrote. said.
“While its unparalleled capital base could help fix gaps in its business model, the company faces two significant, if not existential, challenges this year,” they added. .
RIVN rose 4.6% in premarket trading Thursday.
These key challenges include significantly reducing production costs by $35,000 to $40,000 through design, sourcing and manufacturing improvements, and proving that the next R2 model can be developed more affordably than the previous generation R1. It is included.
Success in these areas is critical for Rivian as it seeks to secure the estimated $2.5 billion in funding needed to launch R2. These efforts will also determine whether Rivian can maintain its independence or whether its intellectual property has greater value to a larger company, Jefferies analysts explained.
“Stock prices are likely to remain volatile as this year unfolds, with Rivian experiencing volume declines from Q1 to Q2. Rivian will reach FCF positive in 2027 by $9 billion. “We expect to run out of US dollar cash,” they wrote.
