Rivian's third-quarter financial results revealed a loss of 48 cents per share, which was an improvement over analysts' expectations of a 64-cent loss, alongside revenue of $2.16 billion that surpassed the $2.0 billion forecast.
This performance prompted Jefferies to upgrade the stock from hold to buy, maintaining a price target of $17, indicating a potential 48% increase from its recent closing price of $11.45. The stock rose over 5% in early trading following this news.
Jefferies noted that Rivian's automotive gross margins are turning positive, with a gross profit of $176 million and an overall gross profit margin of 8%. The firm also highlighted Rivian's strong sales of the R2 mid-size SUV and an increased full-year delivery forecast of 67,000 to 70,000 vehicles.
Additionally, Rivian's upcoming commercial launch of Point-to-Point autonomy in 2027 positions the company as a leader in autonomous driving technology, with potential for software licensing opportunities. Jefferies sees these developments as a favorable entry point for investors, especially after Rivian's stock has declined 32% over the past three months