Stifel has maintained its Buy rating on Rivian and raised its one-year price target to $20 from $17 after the company posted fourth-quarter results and issued 2026 guidance that outperformed Stifel's prior assumptions. The brokerage highlighted multiple areas of progress in the quarter, including cost improvement, encouraging early evaluations of the forthcoming R2 model, and expansion in the higher-margin Software and Services business.
On the automotive side, Rivian reported an automotive gross profit loss of $59 million, a smaller deficit than Stifel had projected at a $122 million loss. In contrast, the Software and Services segment generated $179 million in gross profit, topping Stifel's $130.4 million estimate. Stifel noted these differences as evidence of both operational progress and the growing contribution from software-driven revenue.
Operationally, the brokerage identified roughly a $4,000 sequential reduction in cost of goods sold per vehicle. Stifel attributed this improvement to a greater mix of commercial vans and to operational efficiencies. The firm expects that as R2 production scales, additional cost absorption should follow, although it cautioned that early R2 volumes in the second and third quarters could pressure margins before improvement later in the year.
Stifel emphasized positive pre-production reviews of the R2 and described the model as critical to Rivian's route to profitability. Management's updated guidance for 2026 called for deliveries between 62,000 and 67,000 vehicles, which is stronger than Stifel's earlier forecast of about 52,000. Stifel said this upside was driven by a stronger second-half ramp in R2 production and led the brokerage to raise its 2026 delivery and revenue forecasts accordingly.
Company guidance also included expectations for year-over-year gross profit growth in 2026 and a forecast that Software and Services revenue will increase 60%, with margins in the mid-30% range. Rivian provided full-year targets for adjusted EBITDA and capital spending, anticipating an adjusted EBITDA loss of $1.8 billion to $2.1 billion and capital expenditures of $1.95 billion to $2.05 billion.
Rivian also expects to receive an additional $2 billion related to its joint venture with Volkswagen. That amount is structured as $1 billion contingent on winter testing and $1 billion in non-recourse debt. Stifel incorporated these factors into its revised forecasts and view of the company's near-term trajectory.
Context and implications
Stifel's actions reflect the brokerage's assessment that recent results, the R2 pre-production reception, and the Software and Services momentum collectively support a faster ramp and improved financial profile in 2026. The firm adjusted its valuation and operational outlook while retaining a Buy recommendation.
Disclosure