Rivian Automotive is soaring but Morgan Stanley thinks the stock has an even higher gear

Spencer Platt

Morgan Stanley stayed bullish on Rivian Automotive (NASDAQ:RIVN) following the electric vehicle maker's Q3 deliveries report and reiterated full-year guidance.

The firm has an Overweight rating on Rivian and price target of $60 target to rep almost 67% upside potential for shares from the current level. Rivian topped out at $179.47 per share last year when the IPO created huge early buzz.

"We believe Rivian should be able to get most (if not all of) FY23 behind them before they would need more capital. Our model currently assumes a $3bn equity raise in FY23, $2bn in FY24 and $1bn in FY25," updated Morgan Stanley lead analyst Adam Jonas.

Jonas and team think further control by RIVN of spending and cash burn sets up well, and pointed to an improved production ramp with increased disclosures. Looking even further ahead, Rivian is seen benefiting from the Inflation Reduction Act which can help support the aggressive battery cell and module on-shoring plans through the FY24 horizon.

Shares of Rivian Automotive (RIVN) ripped a 13.09% gain on Tuesday as of 3:30 p.m.