For the EV startup Rivian ( RIVN ) 2022 has brought the most headwinds and headaches as well as supply chain snags that caused the company to consider cutting its production estimates for the coming year.
On the earnings call during May, the business seemed optimistic about its goals for production as well as following a recent discussion with the CFO of the business, Mizuho analyst Vijay Rakesh believes there are enough reasons to remain optimistic.
One example is that even though the company has lost its the executive vice-president Manufacturing Engineering Charly Mwangi, the hiring of the new CEO Frank Klein amidst the restructuring of the company (the company is separating the commercial division that makes R1S and the Amazon delivery van and its retail business, which manufactures both the R1T as well as R1S) is a positive move. “We believe the reorganization ahead of COO Klein starting June 1st could point to potentially more accountable and better execution ahead,” the five-star analyst said.
Klein definitely has the qualifications to aid in the process of turnaround, being the president of Magna Steyr, and then spent 25 years with Daimler in various roles, including Plant director (Kecskemet, Hungary) and the head of Mercedes-Benz Vans operations.
Based on the statements that the firm has made, the R1/EDV production lines for parts that are not chip-based have been “ramping well,” with the chassis pipelines, battery module and inverter/powertrain manufacturing/supply in good condition. However, there are some issues because of “specific” commodity chip shortages however, RIVN is currently in discussions with suppliers to resolve the problem. “With supply key,” Rakesh says Rakesh, “we believe RIVN looks to phase in a second shift, by increasing first-shift hours and adding a second shift to slowly ramp from couple days to full week.”
With seats currently shipping on Amazon’s EDV (electric delivery van) (electric delivery van) Rivian is embroiled in an ongoing controversy in a dispute with Commercial Vehicle Group over car seat prices – however, Rivian is still expecting one-third from the estimated 25,000 vehicles made within C22E to be Amazon EDV vehicles (around 8000 units).
It’s a promising start for Rivian But what do these numbers means to investors? Rakesh believes the current price is an “good entry point.” Rakesh reiterated a Buy rating for Rivian, as well as an investment goal of $80 that implies a 155 percent upside over the current price. (To check out the track record of Rakesh, click here)
In total, RIVN has 15 recent analyst reviewsthat break into 9 Holds and Buys which makes the consensus analyst rating for the stock as a Moderate Buy. The mean price of $51.46 indicates an upside possibility of 64% in the upcoming year. ( See Rivian stock forecast on TipRanks)
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Disclaimer The opinions by the author are exclusively those of the analyst who is featured. The information is meant to be intended for informational use only. It is crucial to conduct your own research before investing any money.