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EV Disruptor Rivian Lauded on Wall Street With Valuation Caution

Wedbush views the Rivian story as a game changer for the EV market. Other firms are more cautious, given its valuation.

Electric-vehicle maker Rivian  (RIVN) - Get Rivian Automotive, Inc. Class A Report on Monday received bullish reviews from analysts at Wedbush, Deutsche Bank and Morgan Stanley.

Meanwhile, JPMorgan and Goldman Sachs were a bit more conservative about the EV maker given its valuation.

Shares of the Irvine, Calif., company have wavered on Monday. At last check the were up 1.1% at $105.80.

Wedbush initiated Rivian coverage at outperform with a price target of $130 a share.

The investment firm said that its electric trucks could disrupt the auto industry over the next decade thanks to an untapped market in electric sport-utility vehicles and electric pickup trucks. 

"Rivian’s debut vehicles, the R1T and R1S, are anticipated to launch in early 2022, competing with GM’s  (GM) - Get General Motors Company Report all-new Hummer, Ford's  (F) - Get Ford Motor Company Report stalwart F-150, Tesla  (TSLA) - Get Tesla Inc Report down the road (Cybertruck), and on a path to disrupt the auto industry over the next decade," wrote Wedbush analyst Dan Ives in a note to investors.

"With over $10 billion in funding before going public and Amazon  (AMZN) - Get Amazon.com, Inc. Report as a 20% owner, a vertically integrated process, 48,000 preorders for the R1 platform and a stable 100,000 unit delivery partnership with Amazon on the commercial front, we believe Rivian has the potential to become one of the leaders in the electric vehicle industry over the next decade," Ives added.

"Rivian is primed to capture the massive influx of current and future EV demand, capitalizing on a unique global total addressable market," Ives said.

Founded by Chief Executive RJ Scaringe in 2009, Rivian is already a top 3 auto manufacturer by market value, despite having booked no revenue yet.

Addressing Rivian's lofty valuation, Wedbush said Rivian has strong potential to be a clear leader in this market and should be valued on a fully scaled unit number into 2025.

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"We believe $2.5 trillion of market share is up for grabs over the next decade in the EV market, with Tesla owning roughly half of our $5 trillion market estimate," Ives wrote.

Morgan Stanley analyst Adam Jonas initiated coverage of Rivian with an overweight rating and $147 price target. 

Jonas said Rivian could challenge Elon Musk's Tesla with its "compelling product," strong management, and access to capital underpinned by the strategic relationship with Amazon.

The analyst said that R1T/R1S was "the most capable/desirable product in the market" for about $80,000. The electric delivery van has the potential to dominate the fast-growing final-mile EV fleet "largely unaddressed by the EV market until now," Jonas tells investors. 

Deutsche Bank analyst Emmanuel Rosner initiated Rivian at buy with a price target of $130 a share.

Rosner also lauded Rivian's unique proposition and partnership with Amazon. "Its solid order book and strong relationship with Amazon should also derisk initial demand, and could position Rivian as a leader in last-mile delivery vehicles," said Rosner in his note.

"On the hardware side, Rivian’s flexible EV architecture supports a rapid cadence of vehicle launches for both personal and commercial applications, creating economies of scale without the need to achieve heroic market share in any given segment," he added.

Meanwhile JPMorgan analyst Ryan Brinkman rated Rivian at hold with a $104 price target, Barron's reported.

And Goldman Sachs rated Rivian neutral, saying the stock was fully valued, CNBC reported.

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