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Rivian shares recover despite price target reduction and recent debt offering

EditorHari Govind
Published 10/10/2023, 16:32
© Pavlo Gonchar / SOPA Images/Sipa via Reuters Connect
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Rivian (NASDAQ:RIVN) Automotive's stock saw a rebound this Tuesday, with an increase of over 5% following a buy rating from UBS analysts. This recovery comes despite a decrease in the price target from $26 to $24, indicating a 4% upside over Tuesday's prices. The rebound is particularly notable as it follows Rivian's unexpected $1.5 billion convertible debt offering, which led to a 20% plunge in the company's stock.

UBS analysts predict that Rivian will surpass its own annual production goal of 52,000 electric vehicles (EVs), potentially manufacturing around 54,500 units. An update on these figures is anticipated in the third-quarter results due in November. The analysts underscored the need for clear communication from Rivian's management team and pinpointed two potential benefits for the company: the launch of a more affordable EV by 2026 and prospective regulatory credits due to traditional automakers delaying their EV objectives.

The United Auto Workers union's recent successful negotiation with General Motors (NYSE:GM) could also have implications for Rivian, potentially resulting in labor-cost advantages at its Georgia plant. So far this year, Rivian shares have seen a 6% increase, compared to a 14% rise in the S&P 500.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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