What? Will Rivian stock hit $23? 1 Wall Street Analyst Thinks So.

Share electric vehicle (EV) manufacturer prices. Rivian Cars (NASDAQ: RIVN) have been declining since it reported first-quarter production and delivery numbers earlier this week. But analysts at Cantor Fitzgerald think this presents investors with new opportunities.

The firm maintained a buy rating on Rivian’s stock this week with a $23 price target. That would represent a whopping 128% gain over the next 12 months or so from its current price.

This stock enthusiasm is about what the company has planned for its next phase of growth.

Affordable electric vehicles (EVs)

This week, Rivian reported that it produced nearly 14,000 vehicles in the first quarter, delivering more than 13,500 of them. That gave some proof that EV started it still expects to match last year’s production rate of 57,000 units.

The report also prompted Cantor Fitzgerald confirm its exciting calling on Rivian stock. Although Rivian does not plan to increase production this year compared to last year’s level, it still expects to achieve “normal” gross profit in the fourth quarter of 2024.

That’s because of a change in strategy that the company announced. It now plans to begin production of next-generation EV platform models at its Illinois production plant. That will allow it to slow down capital spending it had planned for a second plant in Georgia. Cantor has based its price target on a discounted 10-year cash flow analysis, and that the cash flow rate may increase now due to lower capital expenditure plans.

Rivian’s cash flow should also increase as it launches the new R2 car line it launched last month. The all-electric, mid-size SUV will be offered with a base price of about $45,000. And that doesn’t take into account any possible tax credits. Rivian will also inform investors that the more affordable R3 mid-range platform will follow the launch of the R2.

Investors will learn more from the company when Rivian reports its full first-quarter results scheduled for May 7.

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Howard Smith has a position at Rivian Automotive. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has disclosure policy.

What? Will Rivian stock hit $23? 1 Wall Street Analyst Thinks So. originally published by The Motley Fool