Baird analyst Ben Kallo anticipates a positive performance for Rivian Automotive Inc.’s stock in the near future. With the company’s deliveries report scheduled for release next week, Kallo predicts that it will surpass Wall Street’s expectations. While he maintains his bullish sentiment towards Tesla Inc.’s stock as well, he predicts that the electric vehicle giant will fall short of expectations in terms of third-quarter deliveries.
Currently, the FactSet consensus for Rivian’s deliveries stands at 462,000, whereas Kallo’s forecast for the same period is 439,200. However, despite concerns about weakening demand for Rivian EVs, Kallo remains confident in the underlying strength of the company. Recent reports have caused some decline in Rivian’s stock, with a 7.0% decrease in September following a significant 17.8% drop in August. Nonetheless, it is worth noting that prior to this decline, the stock experienced an impressive three-month surge during which it more than doubled in value (+116%).
Kallo highlights the R1S electric sport-utility vehicle as one of Rivian’s highly sought-after models. According to him, there is substantial demand for this particular vehicle, and production has been steadily improving. In addition to a strong market demand, Kallo expects the company to benefit from an optimized supply chain and the utilization of in-house components, leading to cost advantages.
As investors eagerly await the upcoming deliveries report release, there is potential for increased optimism and improved sentiment surrounding Rivian’s future prospects.
Rivian Production and Deliveries Update
Rivian, the electric vehicle manufacturer, is set to release its latest production and deliveries data on or about Oct. 3. According to FactSet’s consensus, analysts are anticipating around 14,000 deliveries.
Analyst Kallo has reiterated his optimistic outlook on Rivian’s stock, maintaining an outperform rating. He has set a price target of $30, suggesting an impressive 42% potential upside from Monday’s closing price of $21.13.
However, Wall Street analysts are experiencing some uncertainty when it comes to third-quarter deliveries. This confusion stems from the company’s planned factory downtime and questions surrounding demand following recent price cuts.
While FactSet’s latest estimate puts third-quarter deliveries at 462,000 electric vehicles (EVs), the varied opinions lead to a wide range of estimates. Analysts’ expectations range from a low of 438,000 to a high of 511,000.
Kallo’s own delivery estimate of 439,200 predicts a solid 28% increase compared to the previous year. However, it also signifies a 6% decline from the second quarter.
Looking beyond Rivian, early reviews of Tesla’s refreshed Model 3 have been positive, and wait times indicate strong demand, particularly in China. Deliveries for the new Model 3 are slated for the early fourth quarter.
It is worth noting that Rivian’s stock has experienced a 14.7% rally year to date, while Tesla’s stock has skyrocketed by an impressive 100.5%. In comparison, the S&P 500 index has gained 13% this year.