Shares of Rivian Automotive Inc (NASDAQ: RIVN) have tanked 35% from its high of $172 in less than a month, but Bank of America says the stock is set to climb all the way back in the coming months.
John Murphy sees upside to $170
In a note on Monday, BofA Securities’ John Murphy assumed coverage of Rivian with a “buy” rating and a price target of $170 that translates to an over 50% upside from here. Defending his bullish call on CNBC’s “TechCheck”, he said:
This company in its early days has proved a lot. It’s already producing vehicles. They’ve got an unbelievably good product, an unbelievably good strategy, great leadership, great technology, great business plan. You have to think about this five to ten years out and not in present terms.
His outlook is in line with several other Wall Street analysts, including Morgan Stanley’s Adam Jonas, who said this morning that Rivian was “the one” that could challenge Tesla.
Joe Terranova ‘partially’ disagrees
On CNBC’s “Halftime Report”, Virtus Investment Partners’ Joe Terranova agreed that Rivian had potential but said now wasn’t the time to buy the stock.
In the long term, yes. It is ultimately going to challenge Tesla. In the future, I’d want to step in and buy Rivian. I think the company with a 20% stake from Amazon is well-positioned. But in the climate that we’re in now, I think you have to respect valuation.
Terranova continues to see legacy automakers like Ford and General Motors as a better buy at this point in time. Last month, Cerity Partners’ Jim Lebenthal said RIVN should trade at “half of where it is right now”.
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