Shares of Rivian Automotive (NASDAQ: RIVN) jumped today after one Wall Street analyst began coverage and reinforced some positive projections from the electric vehicle (EV) maker. Rivian’s management has previously said it expects to achieve positive gross profit in the fourth quarter.
Investors reacted to the new analyst coverage positively. Rivian shares were popping higher by 7.3% as of 2 p.m. ET.
Buy Rivian ahead of its Investor Day
The company is holding its 2024 Investor Day later this week. Ahead of that meeting, Guggenheim analyst Ronald Jewsikow initiated coverage on Rivian with a buy rating and an $18 price target. That would represent a gain of 63% from Monday’s closing share price.
Jewsikow wrote that he sees a “credible path” for Rivian to reach its goal for breakeven gross profit margin in the fourth quarter. He believes that, and improving profitability from there, will be a catalyst for the stock.
The analyst wrote that he is recommending the stock now because his firm’s analysis of unprofitable large-cap stocks showed that investors can achieve outsize gains when “buying before breakeven EBITDA [earnings before interest, taxes, depreciation, and amortization].”
Rivian doesn’t expect to increase production volume in 2024 versus last year. But that’s partly because it is retooling its factory to prepare for its next-generation R2 vehicle platform. Sales of its R2 pickup truck and SUV models are expected to begin in 2026 and will be critical for the company to become consistently profitable.
In the meantime, Rivian has also revamped its R1 platform with software improvements and performance upgrades. Its new drive unit will provide improved power, performance, and range. Investors will hear more from the company after its Investor Day presentation this Thursday, June 27.
Should you invest $1,000 in Rivian Automotive right now?
Before you buy stock in Rivian Automotive, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $723,729!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
Story continues
See the 10 stocks »
*Stock Advisor returns as of June 24, 2024
Howard Smith has positions in Rivian Automotive. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why Rivian Stock Popped Tuesday was originally published by The Motley Fool