Rivian Automotive, Inc. (RIVN) climbed 3% in pre-open trading on Monday to $12.55 after UBS upgraded the electric vehicle maker from Neutral to Buy, with the bank's analysts describing the recent selloff as a buying opportunity. The rating change marks a shift from UBS's prior Neutral stance on the shares.

UBS analyst Joseph Spak assigned a $17 price target to the stock, which has fallen about 19% over the past month. By comparison, the S&P 500 slipped only 1% over the same period, underscoring how far the shares have lagged the broader market in recent weeks. Quoted prices differed across data providers early in the session: Investing.com showed the stock up as much as 6%, while TipRanks listed a gain of roughly 4%.

What UBS Sees in the R2

Spak said early demand for the R2 SUV looks strong, noting that the model is already Rivian's best-selling vehicle by volume. He believes lower-priced trims could draw even more buyers over time.

UBS expects Rivian to exit 2026 with a positive automotive gross margin, and Spak noted the metric could turn positive in the first quarter of 2027. He also pointed to the company's Software & Services business, arguing that its higher margins can help fund Rivian's broader plans. Spak sees the upcoming Autonomy+ point-to-point service as another source of recurring revenue, with a customer launch in early 2027 potentially serving as a catalyst.

Cash burn remains a concern. Even so, Spak noted that Rivian has $13 billion in total available and targeted future capital, and he does not expect the company to raise additional funds before 2029. He cautioned that Rivian "is and will likely remain a volatile stock."

Q3 Beat and Additional Analyst Calls

The upgrade follows a third-quarter report that beat expectations. Revenue climbed 38% year over year to $2.155 billion, deliveries rose 46%, and the loss per share came in better than analysts expected. Rivian ended the quarter with more than $5.5 billion in cash and raised its full-year 2026 delivery guidance.

Jefferies upgraded the stock to Buy around the earnings release, also setting a $17 target and pointing to a pullback of roughly 30% over three months. Evercore ISI reiterated its Outperform rating with an $18 price target. Wall Street's consensus rating remains Hold, based on eight Buys, five Holds and four Sells. That leaves the most recent rating changes sitting more bullish than the Street's overall view.

The stock had been trading near its 52-week low of $11.38 before earnings. It remains well below its 52-week high of $22.69 and is down more than 37% this year.

Firmer Broader Markets

Broader markets were firmer early Monday. The Nasdaq was up 0.9%, the S&P 500 gained 0.5% and the Dow added 0.4%, after all three indexes closed lower on Friday.

The average price target tracked by TipRanks stands at $17, implying roughly 40% upside from recent levels. The checkpoints that will test the recent upgrades are already on the calendar: quarterly deliveries against Rivian's raised full-year guidance, whether automotive gross margin turns positive on UBS's timeline, and the Autonomy+ customer launch eyed for early 2027. Even with Monday's pre-market gain, Rivian shares remain down sharply for the year. The stock last traded at $12.55 in pre-open action.

Source: CoinCentral