Rivian Analyst Says EV Stock Is Still A Buy: Capital Raise 'Not Too Surprising'

Bank of America analyst John Murphy reiterated a Buy rating on Rivian Automotive Inc RIVN, despite the company's plan to raise more capital. 

Rivian shares are trading down in the wake of the company's announcement of a plan to raise more than $1 billion in cash.

The raise will come through Green Convertible Senior Notes due in 2029, according to a Bank of America analyst. 

The Rivian Analyst: Murphy gave Rivian stock a $40 price objective. He called the capital raise "not too surprising" in BofA's note.

The Rivian Takeaways: The analyst outlined various headwinds that Rivian is facing, such as supply chain issues, specifically with semiconductors. 

Rivian burned more than $6 billion in cash last year and its cash burn rate isn’t going to improve much this year, the analyst said.

Still, based on the expected growth of the electric vehicle market throughout the next few years, Rivian’s stock will appreciate to $40 a share, he said. 

Compared to other electric-vehicle startups, Rivian is the most “viable,” Murphy said. 

Benzinga's Take: The stock was a favorite among retail investors, skyrocketing to more than $120 per share following the company’s IPO in November 2021. 

Because Rivian is a growth company with debt and clearly needs more capital, higher interest rates are not making it easy for the California-based auto manufacturer. 

RIVN Price Action: Rivian shares were trading down 2.17% at $14.20 Friday afternoon at publication. 

Photo: Courtesy of Rivian.