Rivian Shares at a Good Entry Point, Says Analyst

Despite Monday's 2% decline, Rivian Automotive (NASDAQ: RIVN) shares have edged higher (+0.6%) premarket Tuesday after the stock was started with an Overweight rating by Cantor Fitzgerald.

Analyst Andres Sheppard also assigned the stock a $22 price target, telling investors in a note that the company benefits from a strong backing from Amazon,

In addition, he said it also has a differentiated product offering and a proprietary charging network, but the stock is down 79% so far this year, leading Sheppard to believe this could be a good entry point.

Elsewhere on Tuesday, Mizuho analyst Vijay Rakesh reduced the firm's price target on Rivian to $50 from $58, maintaining a Buy rating on the stock. Rakesh told investors that he sees a challenging auto end market globally into 2023 due to energy prices, high interest rates, and financing rates impacting affordability.

The analyst feels this could overshadow a more constructive auto production outlook as supply chains and production issues ease. Rakesh added that with electric vehicles continuing to grow, high prices and a “stretched consumer could be real headwinds.”

In the near term, Mizuho sees Rivian Automotive as best positioned with its production ramping, considerable exposure to the US SUV market, and 32% valuation discount to Tesla on 2024 estimates.

Mizuho also cut its price target on NIO (NYSE: NIO) to $28 from $34 in the note.

According to TipRanks, 11 out of 17 analysts have a Buy rating on Rivian, with four at Hold and two at Sell. The average price target of $44 represents a 99.73% potential upside from Monday's close of $22.03.