Financial institution of America weighed in on the $1.3B capital increase fired off by Rivian Automotive (NASDAQ:RIVN) earlier within the week.
Analyst John Murphy stated the increase from the electrical automobile maker was largely anticipated with money burn elevated in 2022, however arrived earlier than the agency’s forecast which embedded capital raises of $5B every in 2024 and 2025
Murphy famous that RIVN’s determination to boost further liquidity stems as a result of slower than anticipated manufacturing ramp and a breakeven level for the corporate that’s now additional down the highway.
“We imagine the corporate opted for an earlier spherical of financing to make sure that monetary assets are adequate to bridge the corporate to profitability and keep away from bigger final minute financing rounds, which can immediate nervousness throughout the investor base.”
The early capital increase didn’t push BofA off a Purchase ranking on Rivian on the view that it is without doubt one of the most viable among the many start-up EV automakers and a relative aggressive risk to incumbent OEMs.
BofA stored a worth goal of $40 on Rivian.
Shares of Rivian Automotive (RIVN) traded flat at $14.54 throughout the Friday premarket session.
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