Stephen Gengaro from the financial services provider Stifel recently included the shares of the electric car manufacturer Rivian in his valuation. That’s why the expert believes in the success of Tesla’s competitor.
• Tesla has competition problems
• Rivian recommended for purchase by Stifel
• Lucid also offers potential
Stifel includes Rivian shares in its valuation
The competition for the electric car pioneer Tesla is becoming increasingly fierce. With Chinese competitors NIO, BYD and Xpeng, the air is becoming increasingly thin for the Musk Group in the People’s Republic. But serious competitors from the USA could also pose a threat to Tesla. The electric car manufacturer Rivian is one of these. The company, based in Irvine, California, recently came into the focus of the financial services provider Stifel. According to information from Yahoo Finance, Managing Director Stephen Gengaro recently included the NASDAQ company’s shares in the rating. Not only does the strategist recommend buying Rivian shares, he also set a price target of $23.00. For comparison: Tesla competitor shares were last traded on the NASDAQ at $22.43 (closing price on December 14, 2023). This corresponds to an upward potential of 2.5 percent.
Strong R1 generation
In an interview with Yahoo Finance, Gengaro explained why they believe in the company’s success. “There are three important reasons for this,” said the chief analyst. He initially praised the company’s R1 series. The first generation of vehicles includes the R1T, a fully electric pickup truck, and the R1S, its SUV counterpart. The two electric cars were first presented in 2018 and will be produced for end customers from 2021. “It is a vehicle that strengthens the company’s brand awareness,” said Gengaro, praising the R1 architecture. “And sales are starting to go up, so that helps.” Rivian is also pursuing a premium strategy with the R1 generation; after all, the cars are rather expensive with prices starting at $73,000.
Successor model is in the starting blocks
But Rivian’s R2 vehicle generation could also consolidate the company’s success, according to the strategist. The medium-sized SUV is scheduled to go into production from 2026 and is coming at exactly the right time, after all, this vehicle class is currently the most popular in the USA. “I think this will ultimately be the driver of high volumes and increase profitability,” Gengaro added. In the summer of 2023, Rivian’s CFO Clair McDonough revealed some details about the latest addition to the product portfolio to Deutsche Bank analyst Emmanuel Rosner, according to a report from “shareribs.com”. The R2 should only cost between 40,000 and 60,000 US dollars and is therefore more in the middle of the range, while the R1 generation was still aimed at customers in the premium segment. Nevertheless, they want to continue to offer both price ranges in the future, says McDonough.
Amazon cooperation offers further possibilities
Finally, Gengaro told Yahoo Finance that the third reason he recommended buying the Rivian paper was the deep cooperation with the online shipping giant Amazon. Not only is the Internet company founded by Jeff Bezos one of the largest donors to Tesla’s competitor and holds around 16 percent of all Rivian shares, the company also makes use of Rivian’s products. The electric car manufacturer produces the EDV (Electric Delivery Van) exclusively for Amazon, which comes in three sizes and is used as a delivery van for online orders. “100,000 vehicles were ordered, what [für Rivian] “It’s very helpful,” explained Gengaro. But that’s not all. As part of pilot programs, Rivian also wants to make its e-vans available to other customers in the future. “And I think that could be a positive catalyst for the stock next year if we are seeing the results of this program.”
Challenges in the production of electric cars
In addition, Rivian can also hold its own against its competitors – such as Tesla and Lucid. “It’s more difficult to build a vehicle than many people think,” said the Stifel expert. “You need volume, […] Because the costs of research and development, building the facilities and putting the production lines into operation are immense.” If Rivian increases its production volume, for example through new manufacturing technologies, the company’s gross profit could approach positive territory by the end of 2024, Gengaro believes. Until In 2026, the sustainable operating cash flow before taxes (EBITDA) should also be positive.
Lucid stock also included in Stifel valuation
In addition to Rivian, shares of competitor Lucid Motors are also included in the financial services provider’s valuation, as Gengaro confirmed to Yahoo Finance. The experts currently recommend holding the stock, with a price target of $5.00 set. Lucid shares were last priced at $4.22 on the NASDAQ (closing price on December 12, 2023). During the interview, Gengaro praised the electric company’s product portfolio, which consists of the Air sports sedan and the Gravity SUV. “This will boost sales as we approach ’24,” said the expert with certainty. “They probably need capital a little sooner than Rivian, which is one of the reasons we haven’t considered Lucid at the moment.” Lucid also receives financial support from the Saudi PIF fund, which holds 60 percent of the shares. “They have a large order and a manufacturing facility being built in Saudi Arabia. So they have a very wealthy shareholder/partner backing Lucid, which I think will narrow the funding gap,” he said.
Editorial team finanzen.net
Selected leverage products on Amazon
With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on Amazon
The leverage must be between 2 and 20
Advertising