Rivian Automotive Inc (NASDAQ:RIVN) shares are trading higher in Thursday's after-hours session following an upgrade from Piper Sandler.

What Happened: Piper Sandler analyst Alexander Potter upgraded Rivian from a Neutral rating to an Overweight rating and raised the price target from $15 to $21.

There are several contributing factors that influenced the upgrade including last week's R2/R3 launch event, a renewed capital expenditures outlook and the recent selloff in shares.

Potter made it clear that buying Rivian shares at current levels is still a risky investment given the potential for negative surprises coming out of the company's revamped strategy, but he highlighted strength in orders for the company's new R2 platform.

"This excitement around new products, coupled with a plan to delay capex and build R2 in an existing plant, should prompt investors to adopt a more bullish stance," the Piper Sandler analyst said in a new note released after the close on Thursday.

Rivian received 68,000 reservations for the R2 in the U.S. within 24 hours of unveiling the new vehicle and other analysts have already pointed to potential success of the vehicle in global markets, particularly Europe.

After aligning the firm's forecast with new guidance out of Rivian, Potter landed on a price target of $21 based on 20-year discounted cash flows and a weighted average cost of capital of 14.2%.

RIVN Price Action: Rivian shares were up 2.71% after hours at $10.98 at the time of publication Thursday, according to Benzinga Pro.

Photo: Courtesy of Rivian.