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Time for Rivian-Heavy ETFs on Better-Than-Expected Delivery Data?
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Rivian's shares saw a 14.3% surge last Friday, achieving a 2023 peak of $24.70, following better-than-expected Q2 deliveries. The rally, 85% over eight sessions and up 40% year to date, was sparked by unswerving customer demand and laudable production capacity.
Driving Factors
Solid Q2 results, despite supply-chain challenges and high trading volume, drove Rivian's rally. Wedbush analyst Dan Ives highlighted the company's second-quarter production results of 13,992 vehicles, which aided "an impressive" delivery number of 12,640 vehicles. The Wall Street consensus was just 11,000 deliveries, as quoted on Business Insider.
Retail investors favor the stock, keeping it among the top traded and trending equities. Rivian, in fact, touched a record daily trading volume on Friday, with more than 180 million shares changing hands, according to Refinitiv, as quoted on Reuters.
The ongoing global push for the restoration of climate, the President’s inclination for the same, emerging countries’ pledge to be carbon-neutral and higher demand for alternative energy amid the fossil fuel rally are great for the future of electric vehicles.
According to an article published on Investor’s Business Daily, sales of electric vehicles (EVs), specifically all-electric or battery electric vehicles (BEVs), will reach approximately 500,000 units during the initial half of 2023. This represents a significant growth of 41% compared to the same period in the previous year.
Additionally, it is projected that the total EV sales in the United States in 2023 will exceed 1 million units, marking the first time such a milestone will be achieved. Such datapoints also acted as a cornerstone for the Rivian rally.
Amazon Partnership Powers Optimism
Rivian's partnership with Amazon for 100,000 electric vans by 2030 further drives growth. Most recently, Amazon announced that it will power its transportation fleet with Rivian’s electric vans in Germany as part of the latter’s goal.
Analysts Bet on Rivian
Wedbush expects continued good news, raising its price target to $30 from $24.70. Rivian's promise of boosting production to 50,000 cars this year despite layoffs fuels the bullish sentiment.
What About Valuation?
A host of production issues, together with a downbeat operating environment for high growth stocks in 2022 (due to rising rates), caused a decline in Rivian's stock price past year. But according to Wedbush analyst Ives, the production problems should mostly be over, as quoted on Business Insider. Rivian currently has a downbeat Value Score of F.
Going Forward
While the stock still trails its 2021 IPO high, analysts predict a robust recovery, seeing Rivian as a long-term growth story and a strong player in the burgeoning EV market.
ETFs to Gain
Against this backdrop, investors who worry about Rivian’s valuation may find the Rivian-Heavy ETFs intriguing options. With automation and technological breakthrough emerging rapidly, fast pickup in electric vehicles is in the cards.
Image: Bigstock
Time for Rivian-Heavy ETFs on Better-Than-Expected Delivery Data?
Rivian's shares saw a 14.3% surge last Friday, achieving a 2023 peak of $24.70, following better-than-expected Q2 deliveries. The rally, 85% over eight sessions and up 40% year to date, was sparked by unswerving customer demand and laudable production capacity.
Driving Factors
Solid Q2 results, despite supply-chain challenges and high trading volume, drove Rivian's rally. Wedbush analyst Dan Ives highlighted the company's second-quarter production results of 13,992 vehicles, which aided "an impressive" delivery number of 12,640 vehicles. The Wall Street consensus was just 11,000 deliveries, as quoted on Business Insider.
Retail investors favor the stock, keeping it among the top traded and trending equities. Rivian, in fact, touched a record daily trading volume on Friday, with more than 180 million shares changing hands, according to Refinitiv, as quoted on Reuters.
The ongoing global push for the restoration of climate, the President’s inclination for the same, emerging countries’ pledge to be carbon-neutral and higher demand for alternative energy amid the fossil fuel rally are great for the future of electric vehicles.
According to an article published on Investor’s Business Daily, sales of electric vehicles (EVs), specifically all-electric or battery electric vehicles (BEVs), will reach approximately 500,000 units during the initial half of 2023. This represents a significant growth of 41% compared to the same period in the previous year.
Additionally, it is projected that the total EV sales in the United States in 2023 will exceed 1 million units, marking the first time such a milestone will be achieved. Such datapoints also acted as a cornerstone for the Rivian rally.
Amazon Partnership Powers Optimism
Rivian's partnership with Amazon for 100,000 electric vans by 2030 further drives growth. Most recently, Amazon announced that it will power its transportation fleet with Rivian’s electric vans in Germany as part of the latter’s goal.
Analysts Bet on Rivian
Wedbush expects continued good news, raising its price target to $30 from $24.70. Rivian's promise of boosting production to 50,000 cars this year despite layoffs fuels the bullish sentiment.
What About Valuation?
A host of production issues, together with a downbeat operating environment for high growth stocks in 2022 (due to rising rates), caused a decline in Rivian's stock price past year. But according to Wedbush analyst Ives, the production problems should mostly be over, as quoted on Business Insider. Rivian currently has a downbeat Value Score of F.
Going Forward
While the stock still trails its 2021 IPO high, analysts predict a robust recovery, seeing Rivian as a long-term growth story and a strong player in the burgeoning EV market.
ETFs to Gain
Against this backdrop, investors who worry about Rivian’s valuation may find the Rivian-Heavy ETFs intriguing options. With automation and technological breakthrough emerging rapidly, fast pickup in electric vehicles is in the cards.
ALPS Clean Energy ETF (ACES - Free Report) – Rivian weight: 7.38%
Parabla Innovation ETF – Rivian weight: 7.13%
VanEck Green Infrastructure ETF (RNEW - Free Report) – Rivian weight: 6.95%
SoFi Social 50 ETF (SFYF - Free Report) – Rivian weight: 6.13%
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN - Free Report) – Rivian Weight: 5.50%