EV watch: Rivian Automotive lands Buy rating at Stifel, Lucid set at Hold

Stifel initiated coverage on Rivian Automotive (NASDAQ:RIVN) and Lucid Group (NASDAQ:LCID) on Thursday. The overall view on the sector is that EV sales have faced stiff headwinds recently, driven by both macroeconomic factors such as high interest rates, inflation, and recessionary worries. EV specific headwinds including range anxiety, vehicle costs, model availability, and charging infrastructure were also observed to have also cut into sentiment. Looking ahead, Stifle believes those EV hurdles will shrink over the next few years to pave the way for sales growth.

Rivian Automotive (RIVN) is on watch after Stifel started off coverage with a Buy rating. The firm said the key positives to the Rivian (RIVN) story include high-quality R1S/R1T driving brand awareness, the agreement with Amazon for 100K electric delivery vehicles, and ability to now sell its commercial van to other fleets. Stifel also noted that the R2 platform addresses the largest vehicle segment in the U.S., which is currently highly concentrated to Tesla (TSLA). On the earnings front, margins are seen getting a lift from new technology (Enduro motor and LFP battery), better pricing, EDV deliveries, new zonal architecture, rising production, and impact of new supplier agreements. Stifel assigned a price target of $23 to Rivian (RIVN).

Lucid Group (LCID) was started off with a Hold rating. Stifel likes the Lucid Air model and sees the deep-pocketed Saudi PIF involvement as a positive, but has concerns over the brand awareness and market for Lucid Air sedan still developing, and production still being in a "prove-it-to-me" stage. As for earning, the LCID margin progression is said to be hard to pinpoint. Another wild card with LCID is if additional capital will need to be raised in 2025. Stifel set a price target of $5 on LCID.

Shares of Rivian Automotive (RIVN) rallied 4.42% in premarket trading on Thursday. Lucid Group (LCID) gained 1.15%.