It’s no fun being an EV investor these days. Once hailed as the decade’s standout trend, the electric vehicle market now resembles a hot potato no one dares to hold. Shares across the board are black-eyed, weighed down by cooling demand and cut-throat competition.
So, it’s time to get a little less bearish, then. That is basically the take from UBS analyst Joseph Spak when assessing Rivian’s (NASDAQ:RIVN) current situation. The stock has been among those to suffer the most, hitting new lows and now down 63% year-to-date. However, Spak suggests that amidst this downturn, Rivian looks more appealing now.
“We believe the near-term risk/reward is more balanced at current levels (upside/ downside case skew is 1.6:1),” Spak said. “The stock price now better considers some of our mid-term concerns. For instance, we believe the stock is now pricing in ~$4.5bn 2025 sales vs. UBSe of ~$5.1bn (even though consensus still stands at $7.5bn). With climbing short interest (now ~18.7% of float), positioning is also a higher risk, especially if a positive data point/catalyst emerges.”
Nevertheless, volatility remains in the cards. On the plus side, a near-term catalyst could come in the shape of a positive update from the R2 order book. While growth on that front is still a while away (2026/27), considering the quality of Rivian’s offerings and the company’s potential, it could “reinforce what Rivian can become.”
On the other hand, R1 price cuts and/or weaker R1 demand – even though Spak thinks current levels already factor in this scenario, it still is a “headline risk” – as well as worries around higher interest rates are all potential “near-term downside catalysts.”
On balance, though, a more positive take is now called for. Hence, Spak upgraded his RIVN rating from Sell to Neutral, while his $9 price target implies shares have modest upside of 3% from current levels. (To watch Spak’s track record, click here)
Overall, 7 other analysts join Spak on the fence with Hold ratings and with the addition of 12 Buys and 3 Sells, the stock claims a Moderate Buy consensus rating. Most also think the shares are now undervalued given the $16.91 average target makes room for one-year returns of ~94%. (See Rivian stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
