Needham analysts increased the price target for Rivian Automotive (NASDAQ:RIVN) to $20 from $13 while maintaining a Buy rating following Rivian’s Investor Day. The analysts expressed confidence in Rivian as a long-term winner in the transition from internal combustion engines (ICE) to electric vehicles (EV). The analysts emphasized Rivian’s strong brand and its ability to produce vehicles that generate high levels of customer passion and satisfaction.
They pointed out Rivian’s focus on cost savings through engineering optimizations, supplier leverage, and factory efficiencies, which are expected to enhance gross margins. The recent joint venture announcement with Volkswagen was highlighted as a validation of Rivian’s software-defined vehicle approach and a crucial source of capital.
The analysts updated their model to reflect Rivian’s Q1 delivery range and the cash inflows from the joint venture. Although their longer-term estimates remain unchanged, the analysts’ confidence in Rivian’s gross margin assumptions has increased. The new price target of $20 is based on a valuation of 20 times the adjusted EBITDA estimate for 2028, discounted back, compared to the previous multiple of 15 times.