Rivian Automotive (RIVN +0.74%) stock is wrapping up the trading week on a high note, revving 10% higher to over $18 as of 12:30 p.m. ET -- and for a most surprising reason:
This morning, investment bank Mizuho raised its price target on Rivian...to $15 a share.
NASDAQ: RIVN
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What Mizuho said about Rivian
Let me repeat that: Rivian stock closed at more than $16 last night. Mizuho just said it's only worth $15 (and gave the shares only a neutral rating -- not a buy). And investors responded by bidding Rivian stock up instead of down.
Does this make any sense at all?
Well, kind of. While Mizuho doesn't seem particularly impressed with Rivian's valuation, analyst Vijay Rakesh did say some kind things about Rivian's electric truck business. Specifically, he noted that the company increased second-quarter electric vehicle (EV) deliveries 9% year over year to about 13,800 units, even as production of new EVs was only about 9,600 units. So not only did Rivian deliver more EVs than most analysts forecast (11,500), but it also must have cleared out a lot of unsold inventory in selling about 44% more electric trucks than it built in the quarter!
Is Rivian stock a buy?
Now, factor these solid sales trends into what Mizuho says is the big story of Q2 -- Volkswagen's $5 billion investment, which has the potential to single-handedly solve Rivian's cash-flow problems -- and things are starting to look up for Rivian.
Admittedly, Rivian is still nowhere near profitable, and it's still burning a lot of cash. But the balance sheet looks a lot more solid than it once was, liquidity risk has vanished for the time being, and "RIVN has a good product roadmap with its lower-cost R2 in 1H26E." While success is far from guaranteed, the company now has a solid shot at becoming a profitable EV maker instead of going bankrupt.
Rivian shareholders have good reason to feel happy about that.
