Al Root

While Rivian stock dropped after the electric-vehicle company reported its first-quarter numbers last week, Wall Street analysts are raising their targets for the price.

About a week ago, Rivian announced a better-than-expected first-quarter gross profit but cut its forecast of deliveries for 2025. Rivian expects to deliver about 43,000 vehicles this year, down from a prior call for about 48,500. It delivered 51,579 in 2024.

Shares dropped almost 6% in response, but Wall Street was fine with the results because the company is on track to launch lower-priced vehicles in 2026 and is doing a good job of controlling costs. For the most part, price targets rose in response to the news.

Two more increases came on Monday. Stifel analyst Stephen Gengaro raised his price target to $18 from $16 and kept a Buy rating on Rivian stock. He cited "solid progress" toward milestones such as bringing the lower-price vehicle to market

Bernstein analyst Daniel Roeska, who rates the stock at Sell, raised his price target to $7.05 from $6.10 following the earnings. He said Rivian's first-quarter results were "better," but that the company had a long way to go. Profits aren't expected for many years and depend on whether Rivian can launch multiple products between now and the end of the decade.

That increase, of 95 cents, is a little unusual. Most Wall Street price targets are rounded to the nearest dollar, acknowledging that valuation is partly art and partly science.

Targets with cents make more sense for stocks with prices of less than $10. For example, the difference between a target of $5 and $5.50 is 10%, a significant amount. For a $50 stock, a target boost to $50.50 is only a 1% increase.

Target prices can change for any number of reasons. The calls are based on analysts' expectations for a company's financial performance, plus what investors are expected to be willing to pay for future earnings -- two elements that can change. Forecasts of profits rise and fall, and valuation multiples change based on growth expectations or perceived risk.

In the case of Rivian, Roeska he lowered his forecast of how fast the money-losing EV maker will burn through cash partly because some money from Volkswagen was coming in earlier than expected. That adjustment worked out to about 95 cents of additional potential upside for the stock -- a jump that is equivalent to about $1 billion in market value for Rivian.

Overall, Wall Street price targets have risen about 13 cents since the earnings, going from $14.18 to $14.31. It is a small move, but it illustrates that Wall Street was generally positive about the numbers,

About one-third of analysts covering the stock rate shares at Buy. The average Buy-rating ratio for stocks in the S&P 5o0 is about 55%.

Rivian stock was up 3.5% in midday trading at $14.76, while the S&P 500 and Dow Jones Industrial Average were up 2.6% and 2.5%, respectively.

The target hikes might be helping, but Rivian also may have gotten a boost because the overall market gained in response to news that the U.S. and China had temporarily suspended the sky-high tariffs they imposed on each other last month.

Rivian makes all the cars it sells in the U.S. domestically and doesn't have many Chinese parts in its cars, if any. The company didn't immediately respond to a request for comment about its Chinese parts content.

The company added $200 million to the capital spending it expects for 2025 capital spending to account for imported equipment it needs for a new factory.

Write to Al Root at allen.root@dowjones.com

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May 12, 2025 12:00 ET (16:00 GMT)

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