Needham analyst Chris Pierce reiterated the Buy rating on Rivian Automotive, Inc. (NASDAQ:RIVN), raising the price forecast to $20 from $13.

The analyst sees Rivian as a long-term winner in the eventual ICE (Internal Combustion Engine) to EV transition, leaning on its ability to create a brand and produce vehicles that drive high customer passion and satisfaction.

Pierce writes that Rivian's strategic focus on cost savings through engineering optimizations, supplier relationships, and factory efficiencies aims to boost gross margins.

The recent Volkswagen AG (OTC:VLKAF) JV underscores Rivian's software-defined vehicle strategy and provides crucial capital infusion.

Rivian could receive as much as $5 billion in capital from the Volkswagen JV versus the analyst's prior modeling of a $3 billion capital infusion across FY25/26.

The analyst highlights that Rivian doesn't have to undergo complex restructurings, as do many of the incumbent OEMs. It also means it can design its supply chain and manufacturing process to be EV-specific from the outset.

Overall, the analyst writes that Rivian has a large and established corporate order pipeline, for which the analyst sees upside potential and an already-formulated, new-model roadmap.

Pierce raised the FY24 revenue forecast to $4.563 billion from $4.254 billion.

Price Action: RIVN shares are trading lower by 7% to $13.46 at last check Friday.

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