Rivian Automotive upgraded to Outperform at Evercore ISI ahead of ’round 2′

Evercore ISI analyst Chris McNally upgraded Rivian Automotive (RIVN) to Outperform from In Line with a price target of $35, up from $30. “Who is the next Tesla?” is the “simple, yet vexing, question constantly asked by investors,” the analyst stated. While the analyst “hates that question,” the firm posits that “a better question would be” to ask what are the key similarities that have made Tesla and BYD responsible for greater than 40% of global NEV sales and concludes that the answers include brand, scale economics and vertical integration. In that context, the firm argues that outside of Tesla (TSLA) and BYD, Rivian is “the only OEM showing increased evidence” of meeting all three criteria. Of the three criteria, the two the firm focused on for its upgrade are escape brand velocity of R1S, with the R2 to further expand with an SUV, and a path to 15%-20% gross margins, says the analyst, who further notes that the company has executed on both cost and delivery targets. The firm, which sees the R1 plus R2 setting up Rivian’s “round 2,” would be buyers at current levels and expects “solid” production and deliveries to be reported for Q3.