UBS analysts upped their Rivian (NASDAQ:RIVN) stock rating to Neutral from Sell, citing a more balanced risk-reward profile at current valuation levels.
“The stock price now better considers some of our midterm concerns. For instance, we believe the stock is now pricing in ~$4.5bn 2025 sales vs. UBSe of ~$5.1bn (even though consensus still stands at $7.5bn),” analysts noted.
“With climbing short interest (now ~18.7% of float), positioning is also a higher risk, especially if a positive data point/catalyst emerges. That said, we'd expect the stock to remain volatile.”
UBS suggests that potential short-term upside catalysts could include positive developments regarding R2 orders, which would underscore RIVN’s future growth prospects, expected more likely around 2026/27.
In contrast, potential downside risks in the near term might include price reductions for the R1 model or weaker demand for the same, despite the belief that these factors are already accounted for in the current stock price. Headwinds stemming from rising interest rates could also pose additional risks to the EV stock.