TD Cowen says buy Rivian stock ahead of R2 launch

Rivian Automotive Inc (NASDAQ: RIVN)) is inching higher on Tuesday after a senior TD Cowen analyst issued a bullish note in its favour.

As Itay Michaeli upgraded RIVN to “buy”, it pushed past its major moving averages (50-day, 100-day) on March 10th, indicating the upward momentum could sustain in the near-term.

Despite today’s surge, Rivian stock remains down some 13% versus its year-to-date high.

Why is TD Cowen Bullish on Rivian Stock?

According to Itay Michaeli, investors should load up on RIVN stock as the company prepares for its high-stakes launch of the R2 sports utility vehicle (SUV) on Thursday, March 12th.

The TD Cowen analyst expects this rollout to prove a transformative volume driver for Rivian.

While the R1 series established the brand’s luxury credentials, the R2 – priced more competitively, starting at about $45,000 – targets the heart of the American compact SUV market.

Michaeli’s data suggests full-scale US demand for the R2 would mean “212,000 to 335,000” units annually.

“Our newly introduced R2 model suggests full-scale US demand … supporting above-consensus 27’ outcome,” he told clients in a research note on Tuesday.

Itay Michaeli sees R2 emerging as a legitimate threat to established segment leaders like the Tesla Model Y.

RIVN shares to rally as firm hits profitability milestone

Beyond consumer demand, the upgrade reflects growing confidence in Rivian Automotive Inc’s improving financial architecture.

Michaeli’s raised $20 price target assumes a narrower than previously estimated EBITDA loss in 2027 and a higher terminal multiple of 17x.

This optimism is fuelled by RIVN’s aggressive efforts to strip complexity out of its manufacturing process; for instance, the R2 platform reduces the number of systems-on-a-chip from four to just one.

By streamlining its hardware and leveraging the joint venture with Volkswagen for software and electrical architecture, Rivian is effectively lowering its break-even point.

TD Cowen sees these structural improvements as key to navigating the “transition year”, reaching sustainable profitability by 2027.

This makes Rivian shares even more attractive to own at the current price.

How to play Rivian ahead of the R2 launch?

Itay Michaeli sees the risk/reward in RIVN shares as favourable, especially since market sentiment now seems to have reached a bottom.

He believes the next phase of EV demand growth will be driven by next-generation launches and personal autonomous vehicle technology – areas where Rivian is currently leading.

By upgrading now, TD Cowen is signaling that the R2 launch is not just a product reveal, but a fundamental “inflection point” that could redefine the company's valuation for years to come.

Note that options traders seem to agree with the firm’s constructive view on Rivian Automotive as well.

Contracts expiring mid-June currently have the upper price set at about $21.5, indicating potential upside of more than 25% over the next 12 months.