Why Morgan Stanley STILL Sees 220%+ Upside for RIVN Stock thumbnail

Why Morgan Stanley STILL Sees 220%+ Upside for RIVN Stock

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The back of a silver Rivian (RIVN) pick-up truck.

Source: Miro Vrlik Photography / Shutterstock.com

The fourth quarter ended on a low note for the electric vehicle (EV) sector, with some prominent automakers missing delivery estimates. Tesla (NASDAQ:TSLA) turned plenty of heads when its recent deliveries report fell short of adjusted Wall Street expectations. But it wasn’t the only company to report a miss. So did Rivian (NASDAQ:RIVN).

Specifically, Rivian reported 8,054 vehicles delivered and 10,020 vehicles manufactured for Q4. This brought its totals for the year to 20,332 vehicles delivered and 24,337 vehicles manufactured. As InvestorPlace’s Eddie Pan reports, the company fell just short of its internal production estimate for 25,000 vehicles, a roughly 2.6% miss.

Now, RIVN stock is pulling into the new year amid a complicated economic landscape. But that doesn’t mean Wall Street has soured on shares. In fact, Morgan Stanley believes the EV stock has significant upside potential.

Does RIVN Stock Have 220% Upside?

As Pan also points out, Rivian’s Q4 miss was not as significant as Tesla’s, which missed estimates by 3.7%. Like the struggling EV leader, Rivian is recovering from a difficult quarter and an overall difficult year. Although shares are up 1% today on positive market momentum, it’s impossible to ignore the dark cloud hovering over the EV sector.

Still, some experts believe investors should buy RIVN stock on the current dip before it skyrockets. Morgan Stanley analyst Adam Jonas recently laid out a cautiously bullish case, forecasting upside of more than 220%:

“For a year that started tough with a cut to IPO production and delivery estimates, RIVN managed to increase both production and deliveries Q/Q throughout the year, with 4Q deliveries over 550% higher than that of 1Q. We expect to see RIVN continue to scale production next year, and maintain our FY23 delivery estimate of 50k vehicles.”

While Jonas isn’t sure if the macroeconomic landscape facing Rivian will improve anytime soon, he maintains an overweight rating and a highly bullish price target of $55 per share. As Seeking Alpha reports, the analyst “believes RIVN offers investors access to a compelling product with a unique angle in the commercial vehicle space.”

This bullish take suggests that Jonas isn’t too worried about competition in the electric truck space as well. Recently, Ford’s (NYSE:F) F-150 Lightning received MotorTrend’s “Truck of the Year” award. However, Ford also recently raised the price on the Lightning, which may work against it in 2023. All told, Jonas seems confident that Rivian has secured a solid place in the EV sector.

What Comes Next

It’s easy to see the road ahead as difficult for Rivian when focusing on the EV sector as a whole. But Jonas’ case raises some important points, highlighting RIVN stock’s resilient nature and potential for growth. Jonas isn’t the only expert bullish on shares, either.

InvestorPlace’s Luke Lango recently described the company as a “Tesla-Killer” set to soar in 2023. Lango maintains a long-term bullish thesis on RIVN stock, citing brand equity, strong demand and encouraging partnerships. He also notes that Morgan Stanley had previously flashed “doomsday” signals regarding shares. Now that the firm has shifted its take, others may follow suit as market conditions become more favorable.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.