D.A. Davidson Upgrades Rivian Stock (RIVN), But Stays Cautious on the EV Maker

D.A. Davidson analyst Michael Shlisky upgraded Rivian Automotive (RIVN) stock to Hold from Sell with a price target of $14. The analyst cited a “more reasonable valuation” following the recent selloff as the reason for his upgrade. That said, the analyst prefers to be on the sidelines amid ongoing challenges.

D.A. Davidson Weighs in on Rivian Stock

Rivian stock has declined more than 24% year-to-date. Shlisky noted that much of the recent selloff has been due to “mixed-at-best investor reaction” to the pricing of early R2 trims.

Specifically, the 4-star analyst added that the pricing of R2 trims was 55% higher than expected for some customers. Shlisky sees this “not-insignificant gap” as one of the risks that could stand in the way of Rivian hitting its target of delivering 20,000 to 25,000 R2 units in 2025 and of positioning it as the best mid-size EV SUV launch in five years.

Nonetheless, Shlisky upgraded RIVN stock on improved valuation, especially considering some recent developments. It is worth noting that Rivian recently completed the winter testing of its technology in the first vehicle under its joint venture with Volkswagen (VWAGY). This triggered an additional $1 billion investment from Volkswagen. Moreover, Uber Technologies (UBER) has agreed to invest up to $1.25 billion in Rivian through 2031, subject to certain milestones. Uber is expected to purchase 10,000 fully autonomous R2 robotaxis, with the option to purchase up to 40,000 more in 2030.

Despite the recent positive developments, several analysts remain cautious on Rivian stock due to a slowdown in EV adoption. The end of $7,500 federal tax credit is also expected to impact EV demand.

Is RIVN Stock a Buy, Sell, or Hold?

Given the ongoing challenges, Wall Street has a Hold consensus rating on Rivian stock based on nine Buys, eight Holds, and five Sell recommendations. The average RIVN stock price target of $17.50 indicates 17.1% upside potential.