California-headquartered EV manufacturer, Rivian Automotive (NASDAQ:RIVN) is all set to close the week with the acquisition of a route planning company, Iternio, and a positive update about maintaining production guidance in its latest annual shareholder letter.
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Acquisition Will Enhance Travel Experiences
Rivian disclosed the purchase of Sweden-based Electric Vehicle route planning company, Iternio for an unrevealed sum. The acquired company is the developer of the “A Better Routeplanner” (ABRP) app, which enables EV drivers to plan and compare routes and track charging stop options. Rivian CEO RJ Scaringe indicated that the deal was closed in Q1.
To add, both companies plan to maintain and improve the ABRP as an independent app for EV drivers. The deal will also incorporate ABRP’s technology into Rivian’s in-vehicle navigation system and into its mobile app, which has a trip planning experience on it.
Iternio was formed in 2018 by Bo Lincoln, now CEO, with two business operating lines, one being the ABRP app and the second being a backend that provides routing data services for other entities.
Rivian Production Guidance
This week also highlighted Rivian’s latest annual letter to shareholders wherein it reaffirmed the 2023 production guidance of 50K vehicles at the manufacturing plant in Normal, Illinois. This marks a 100% growth from 2022 levels. As of March 31, 2023, the company has produced 35,000 vehicles post the launch of four vehicles across the R1 and RCV platforms (R1T, R1S, EDV700, EDV500).
Lastly, it adds that its second manufacturing plant, under development, in Georgia is expected to produce 400,000 units of R2 annually, once it’s operational at full capacity.
Early this week, Rivian partnered with Tesla (NASDAQ:TSLA) to offer customers the latter’s supercharger network in the U.S. and Canada by the spring of 2024. In early 2025, it will install North American Charging Standard (NACS) sockets in its R1 models.
Is Rivian Good to Invest In?
Of the 15 Wall Street Analysts covering Rivian stock, nine rate it a Buy, four have assigned a Hold, and two stand with a Sell rating. This takes the analysts’ average consensus rating on RIVN to a Moderate Buy. The average price target for the upcoming 12 months stands at $22.20 implying a 51.9% upside potential from current levels.
In the past two days, three rating agencies have reaffirmed their Buy ratings on RIVN. Truist Financial and Canaccord Genuity have price targets implying upside potential of 91.5% and 173.6% respectively.
Mizuho Securities Analyst Vijay Rakesh set a price target at $27 (vs. prior $30), indicating an 84.7% upside potential from current levels. While the analyst notes that Rivian is adapting well to the strong consumer demand, he has lowered R1/EDV delivery expectations for the upcoming two fiscal years.
Year-to-date, the stock has lost 15.7%. Contrarily, over the past 3 months, it has been up 10%.
