Jefferies Makes Major Call on Rivian Stock

What happened

Jefferies upgraded Rivian to Buy from Hold while keeping its $17 price target, citing a more attractive entry point after a recent selloff. Rivian reported record third-quarter deliveries of 19,248 vehicles and revenue of about $2.16 billion, ahead of Wall Street expectations.

Confirmed

Global impact / market context

An upgrade can draw investor attention to Rivian's improving sales and path toward profit. Jefferies expects gross margin, which means profit per sale, to turn positive as R2 production grows, with adjusted EBITDA breakeven in 2028 and free cash flow breakeven near late 2029.

Analyst inference

Jefferies sees Rivian's R2 in the $45,000 to $55,000 price range between Tesla models it calls increasingly commoditized and Ford's lower-cost EV platform, which may not ramp until late 2027. That positioning could support demand and pricing as Rivian scales production.

Analyst inference

What to watch

1. Watch Rivian's R2 production ramp and whether higher-end launch trims sustain stronger-than-expected demand, since Jefferies tied its profit outlook to scaling R2 output. Confirmed
2. Track whether Rivian's automotive gross margin turns positive and group gross margin approaches roughly 12% in 2027, as Jefferies forecasts. Proposed
3. Monitor progress toward adjusted EBITDA breakeven in 2028 and free cash flow breakeven near late 2029, since slipping timelines could weaken the upgrade case. Analyst inference

Evidence

• gurufocus.com