Why Rivian Stock Gained While the Market Slumped Today

Investors might have been a collectively gloomy bunch on Tuesday, but they ended up being positive about the future of electric vehicle (EV) maker Rivian Automotive (NASDAQ: RIVN). On the back of a new and bullish analyst note, they traded the stock up by almost 2% during the day. That was in marked contrast to the general trajectory of equities, reflected in the S&P 500 index's 1.1% decrease.

Potentially electrifying returns

The analyst behind the positive note was Benchmark's Mickey Legg, who that morning reiterated his existing buy recommendation on Rivian and his $18 per-share price target. That level is a robust 61% above the stock's most recent closing price.

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According to reports, Legg's justification comes from what he feels is Rivian's good access to capital. After all, vehicle manufacturing is capital intensive and the company is habitually loss-making. The pundit also waxed bullish about the company's R2, the next-generation SUV platform it aims to debut in 2026.

Legg addressed management's recent cut in delivery guidance when it reduced its estimate for first-quarter deliveries to 8,000 from its previous 10,000. In the analyst's view, this was expected given the seasonality of sales and limited demand. The devastating wildfires in Los Angeles should also affect the metric.

A decent stock in a struggling industry

Another aspect of Legg's argument is that, while quarterly deliveries are expected to be softer than previously anticipated, Rivian is maintaining its annual forecast of 46,000 to 51,000 deliveries for the entirety of 2025.

Rivian as a company feels as secure an investment as any EV maker, although any investment decision has to be influenced by the shaky state of the industry in general. Personally, I'd steer away from EV stocks just now, as they're experiencing plenty of growing pains, but Rivian isn't a bad choice for investors determined to buy into the sector.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.