Joseph Spak, RBC analyst, has positive comments about Rivian (RIVN), production ramp efforts.

According to Spak, he’s more optimistic about Q1 deliveries of 2,100 units. He also sees potential for upside. Spak stated in a client note that RBCs data indicates an increasing production ramp.

Rivian stated earlier in the month that 1,410 vehicles would be produced in 2022. However, Rivian said recently that their average weekly production rate had nearly doubled to Q421 numbers.

RBC has estimated that there are approximately 320 cars produced per week. According to this, Q122 would produce 2.37k.

Visible Alpha 1Q22 consensus deliveries are 1.5k, but this is based only on 7 inputs. Spak said that 1Q22 production will be closer to the level of 2.4k, but we assume that approximately one week is transit time.

An analyst commented on the huge selloff of Rivian shares.

Although the bar is now reset, we still have faith in management and product. We also believe strongly in the plan for the company’s go-to-market strategy. Rivian seems to be thinking carefully about all aspects of the value chain, including how it should evolve downstream as well as upstream. We believe the immediate risk to supply chain is high, however management has reexamined their outlook and considered these risks. Current levels are attractive as entry points for long-term investors. As shown in the above graph, it is possible that we will start to see positive data points. Investors can gain confidence in the outer-year potential by achieving near-term goals. Spak said that the valuation is attractive and offers interesting risk/reward.

By Senad Karaahmetovic