Investing.com -- Rivian Automotive (NASDAQ: RIVN) shares rose 5% Tuesday morning following an upgrade from TD Cowen to buy from hold, with a price target of $20. Shares closed Monday at $15.87.

The upgrade comes after TD Cowen analyst Itay Michaeli conducted a detailed R2 demand analysis. Michaeli raised his price target based on a narrower 2027 EBITDA loss estimate and a higher terminal multiple of 17x versus 14.5x.

"Our newly introduced Rivian R2 model suggests full scale US demand in the 212k-335k range, supporting an above-consensus ’27 outcome," Michaeli commented.

The analyst’s demand projections for the R2 model suggest potential upside to 2027 consensus estimates. TD Cowen views the risk/reward favorably heading into the R2 launch, particularly with shares down approximately 20% year-to-date.

In a broader research report, Michaeli noted that US electric vehicle sentiment may be approaching a bottom, with the next phase of demand growth potentially arriving in 2027-28. The analyst cited next-generation EV launches and the entry of personal autonomous vehicles as conditions that could materialize within 18 months.

TD Cowen also maintained a buy rating on Tesla (NASDAQ: TSLA).