Though there are a lot of supercharged growth opportunities for investors to choose from, the electrification of consumer vehicles and enterprise fleets is perhaps the most no-brainer opportunity to make money over the long run — at least according to a select few Wall Street analysts.
Based on a report issued in November by Market Research Future, the aggregate market value of electric vehicles (EVs) is expected to grow by nearly 25% annually between 2022 and 2030. By the turn of the decade, it’ll be nearing an estimated $1 trillion market value. This is the type of sustainable growth that could make patient investors a lot richer.
According to the lofty price targets issued by two Wall Street analysts, these well-known electric vehicle stocks offer up to 242% upside over the next year.
Rivian Automotive: Implied upside of 242%
If you’re looking for true home-run potential in the EV space, the hottest initial public offering of 2021, Rivian Automotive ( RIVN 8.13% ), is the stock to consider. Piper Sandler analyst Alexander Potter recently lowered his firm’s price target on Rivian by $18 a share. Nevertheless, the new target of $130 implies up to 242% upside relative to where Rivian’s shares ended this past week.
The buzz surrounding Rivian can be boiled down to three catalysts.
First, long before the company went public, it landed a mammoth order for 100,000 electric vans from e-commerce kingpin Amazon. This September 2019 order validated Rivian as a force to be reckoned with in the EV space, as well as (presumably) gave the company an avenue to generate plenty of future cash flow.
Second, speaking of cash, Rivian ended the year with $18.4 billion in cash, cash equivalents, and restricted cash. Building an EV company from the ground up isn’t cheap. Rivian is spending $5 billion alone on a manufacturing plant in Georgia that’ll begin production in 2024 and yield 400,000 EVs annually. But having more than $18 billion on hand gives Rivian a much longer runway than most EV start-ups.
The third catalyst is the uniqueness of Rivian’s EV lineup. In particular, the R1T pickup is effectively a luxury truck that’s catered to people who love the outdoors. With little in the way of direct competition, optimists are banking on the R1T to be a serious moneymaker. Through March 8, Rivian had taken approximately 83,000 reservations for its R1 series vehicles (R1T truck and R1S SUV).
But reaching $130 a share could prove difficult, if not outright impossible, over the next year. Supply chain concerns …….