Rivian Automotive Inc has surged nearly 60% since early April, yet a BNP Paribas analyst believes the rally may still have legs.
James Picariello maintains a bullish outlook on the EV maker, citing its strong execution and compelling strategy for 2025 as key drivers that could fuel additional upside in RIVN shares over the coming year.
Despite the recent run-up, Rivian stock remains just shy of its year-to-date high at the time of writing.
Rivian stock to benefit from ASP monetisation
Picariello is bullish on Rivian shares primarily because the electric vehicle manufacturer continues to improve its gross profit.
Plus, the Nasdaq-listed firm is strongly positioned to navigate the rapidly evolving tariffs landscape in 2025 as well, he told clients in a research note today.
But most importantly, the investment firm recommends owning RIVN stock at current levels since it’s not compromising on average selling price (ASP) in pursuit of volume sales for its R1 this year.
Picariello expects ASP monetisation to help Rivian fatten its gross profit margin moving forward.
This winning strategy also positions the EV maker strongly for the expected launch of its R2 model in early 2026, he added.
RIVN shares will rally as production scales efficiently
BNP Paribas remains constructive on Rivian stock despite its recent rally, also because the EV firm has secured a $6.6 billion loan from the US Department of Energy (DOE) to set up its 2nd production facility in Georgia.
This funding is a strategic advantage that will enable RIVN to scale production efficiently, analysts led by James Picariello argued in their latest report.
Earlier in May, the Irvine-based firm reported its financial results for the first quarter that handily topped Street estimates.
The EV maker lost 41 cents a share on $1.24 billion in Q1, ahead of 76 cents a share of loss and $1.01 billion in revenue that experts had forecast.
That said, Rivian is not a dividend stock at the time of writing.
Should you invest in Rivian at current levels?
James Picariello is thoroughly impressed by Rivian’s cash position, which currently beats the debt on its balance sheet.
A clear road to sustainable free cash flow was among other reasons cited for the bullish view on the EV stock.
All in all, the BNP Paribas analyst is convinced that RIVN shares will extend gains as the automaker continues to leverage its liquidity sources, including its team-up with Volkswagen, to expand and grow.
On Monday, he reiterated his “outperform” rating on Rivian stock and raised the price target to $20, which indicates potential upside of another 23% from current levels.
Other Wall Street analysts, however, do not particularly share his optimism on the EV company, given that the consensus rating on it currently sits at “hold” only.
The post Rivian has a winning EV strategy in 2025: here’s what it is appeared first on Invezz
