Rivian Is Entering Its R2 Era. The Stock Is a Buy for Baird.

Rivian CEO RJ Scaringe unveiled the R2 platform in March 2024. (Photo by Phillip Faraone/Getty Images for Rivian)

Key Points

• Baird analyst Ben Kallo upgrades Rivian shares to Buy from Hold and raises the price target to $25 from $14.
• Rivian’s R2 platform, launching in mid-2026, is expected to boost brand, product demand, and stock performance.
• Only 30% of analysts rate Rivian shares Buy, compared with 55% for stocks in the S&P 500.

New models can overcome weakening electric-vehicle demand, making Rivian stock a buy for one Wall Street analyst heading into the new year.

On Thursday, Baird analyst Ben Kallo upgraded his rating to Buy from Hold, and raised his price target to $25 a share from $14.

“2026 is the year of R2,” wrote Kallo.

R2 is Rivian’s second EV platform. Its R1 vehicles are R1S, an all-electric SUV, and the R1T, an all-electric pickup truck. The auto maker is slated to start selling R2 vehicles in mid-2026.

R2 can “be a boost for Rivian’s brand, product demand, and thus by extension the stock,” the analyst added.

Kallo also pointed out that Rivian’s work on autonomous driving, which includes custom-designed microchips, is positive for the company’s long-term competitiveness.

“We want to own [shares] into the new product cycle,” he said.

Shares rose 15%, closing at $20.28 on Thursday, while the S&P 500 and Dow Jones Industrial Average added 0.8% and 0.1%, respectively. Thursday gains left Rivian stock up about 52% this year.

The upgrade comes at an uncertain time for EVs. Sales in October and November fell after the removal of the $7,500 federal EV purchase tax credit in September.

Loss of the credit is a headwind to 2026 EV sales. Wall Street expects Rivian to sell about 66,000 vehicles. A year ago, that estimate was 97,000 vehicles. Rivian is expected to deliver about 43,000 cars in 2025.

Overall, 30% of analysts covering the stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Rivian shares is about $16.

Write to Al Root at allen.root@dowjones.com