Shares of Rivian Automotive (RIVN) were gaining ground on Tuesday and notched an 8% gain thanks to an upgrade at TD Cowen to Buy from Hold amid expectations for favorable demand projections for the company’s R2 mid-sized SUV.
Rivian (RIVN) will debut the R2 on Thursday at SXSW in Austin, Texas, with pricing expected to place the vehicle competitively with Tesla’s (TSLA) Model Y, the Hyundai (HYMTF) Ioniq5, and the Ford (F) Mustang Mach-E.
“Our newly introduced Rivian R2 model suggests full scale US demand in the 212K to 335K range, supporting an above-consensus 2027 outcome,” TD Cowen analyst Itay Michaeli said in a note to clients, with his expectations exceeding consensus estimates for the vehicle.
Accordingly, Michaeli believes this will narrow the company’s anticipated 2027 EBITDA loss and lead to a higher terminal multiple of 17x versus 14.5x. With shares down more than 10% so far this year, Michaeli believes the stock now presents a favorable risk/reward.
Michaeli raised his price target for Rivian by 18% to $20, suggesting a 26% upside from Monday’s close.