If there’s one thing that financial markets don’t like, it’s uncertainty – and President Trump’s tariffs have thrown a huge bucket of uncertainty right into the mix. It’s not just that his aggressive tariff policy has ignited a competitive trade war with our largest trading partners, Canada and Mexico – it’s also that the mercurial President will announce tariffs, walk them back, and reimpose them. He’s created an environment that makes it difficult for investors to predict what’s coming next.
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For this week, however, we are ready to risk a prediction. The President has announced that a 25% tariff will take effect on all foreign-made automobiles and automotive parts, effective on April 2. A few immediate effects are obvious: the price of cars will likely jump, pushing the average cost of a new vehicle above the $50,000 mark. Going forward, the average age of the nation’s auto fleet, already at 12 years, is likely to increase, as vehicle owners choose to keep their cars, or to buy used, rather than buy new.
Those immediate effects suggest some ripples of their own. Auto maintenance companies are likely to see a boost, as drivers make sure that their older vehicles are in good running order, and American-based car makers will find a competitive advantage in being tariff-exempt. We’ve used the TipRanks data platform to look up the broader Wall Street picture on two stocks, one from each of these categories, that look like they could gain on tariff pain; here are the details, and some analyst commentary.
Driven Brands Holdings, Inc. (DRVN)
The first stock we’ll look at is Driven Brands, a $3 billion company that combines automotive services with the franchise business model. Driven Brands controls a network of subsidiary franchise companies, offering services such as quick oil changes and other maintenance, paint and body work, and glass repair. Brands in the company’s network include Take 5 Oil Change, Maaco, Auto Glass Now, Meineke, and CARSTAR. Together, these – along with Driven’s other brands – employ over 10,000 people at more than 5,000 locations in over a dozen countries, and service more than 70 million vehicles every year.
The prospect of tariffs driving up new car prices is likely to push car owners to keep their current vehicles longer, and older vehicles are more likely to require increased maintenance cycles. This could benefit Driven Brands, which is already seeing a trend toward increased maintenance and service demand. In fiscal 2024, the company reported a modest 2% increase in annual revenue, and a 1% bump in same store sales growth – but the Take 5 Oil Change brand reported 16% growth in full-year revenue, and a 7% increase in same store sales.
At least in part due to that trend, Driven Brands in February of this year entered into an agreement to sell off its US car wash business. The transaction, worth $385 million, will see Driven sell its car wash brands to Express Wash Operations. The sale is expected to close in 2Q25.
Turning to this company’s financial results, we find that Driven’s last report, covering both full-year 2024 and 4Q24, marked its sixteenth quarter in a row of same-store sales growth – an impressive statistic that underscores the company’s strong base. The strongest brand in the line-up is Take 5 Oil Change, as can be seen from the annual revenue and same-store growth noted above. For the full fiscal year, Driven saw revenues of $2.3 billion; Q4 revenue came to $564 million. We should note that the quarterly revenue missed the forecast by $8.83 million, although the quarterly non-GAAP EPS of 30 cents was 12 cents per share better than had been expected.
Starting with the first quarter of fiscal 2025, Driven Brands will begin reporting Take 5 Oil Change as a stand-alone business segment. The change is intended to draw attention to the company’s fastest growing unit, and to emphasize the company’s growth potential in the wake of the car wash business divestiture.
This automotive service franchise company has caught the eye of Baird analyst Peter Benedict, who is rated by TipRanks as #56 out of more than 9,400 Wall Street analysts. Benedict sees strong potential in this company, thanks to its unique niche and successful franchise model. Moreover, the analyst is also encouraged by Driven’s newly placed emphasis on its strongest segment. He writes of Driven Brands, “We continue to see significant value in shares. With the overhang from U.S. Car Wash having been removed, and financial re-segmentation shining light on the growth engine that is Take 5, we see plenty of scope for multiple expansion (shares trade at ~9x FY25E EBITDA vs. peers at 10x-12x) as leverage continues to decline and management rebuilds investor confidence in the appeal and durability of this resilient/needs-based, highly franchised business.”
Benedict goes on to rate DRVN shares as Outperform (Buy), and his $25 price target implies a robust one-year upside potential of ~50%. (To watch Benedict’s track record, click here)
Overall, this stock gets a Moderate Buy consensus rating from the Street, based on 12 recent analyst reviews that include 7 to Buy and 5 to Hold. The shares are priced at $16.74 and their $19.91 average target price suggests a gain of ~19% lying in wait for the next 12 months. (See DRVN stock forecast)
Rivian Automotive (RIVN)
Next on our list is an electric vehicle company, Rivian Automotive. You might think that an EV maker would face a difficult environment in the coming years, given the Trump Administration’s known preference for promoting fossil fuel energy and combustion-engine vehicles, and for ending subsidies on EVs – but Rivian brings some strengths to the table. To start with, the company manufactures its vehicles entirely in the US, at an assembly plant in Normal, Illinois. The company first acquired the factory space in 2017, so its commitment to US manufacturing is long-standing, and today Rivian’s factory includes lines for Stamping, Body, Paint, Propulsion, General Assembly, and End of Line, all housed in a state-of-the-art modern facility. Rivian has emerged as a leader in high-tech manufacturing. Together, the company’s combination of domestic manufacture and workforce with cutting-edge tech should stand it well in light of Trump Administration policies – especially given the 25% tariff on imported cars and auto parts.
Rivian is notable for more than its domestic manufacturing footprint. The company has also survived the long pre-production phase of the business, and put its unique vehicle design into regular production. The company currently has two models on the assembly lines and on the market, the R1S and the R1T, and its next model, the R2, is planned to begin deliveries in 2026. Rivian’s vehicles are pure-play battery-electric, and designed to fit the buyer’s lifestyle, as well as transportation needs.
The technology behind the vehicles is Rivian’s unique ‘skateboard’ chassis design. This is essentially a flat platform with wheels at the corners – and equipped at the factory with fittings to take a wide range of hardware and body works. The vehicles are built with independent electric motors on each wheel, rather than a more traditional drivetrain, in a configuration that combines weight savings with solid performance. The chassis is designed to allow for easy manufacture of a wide range of final vehicle styles. Rivian has also adapted its skateboard chassis system to the production of an all-electric commercial delivery van. The company’s delivery van is already in use by Amazon, and delivered over 1 billion Amazon packages last year.
This brings us to Rivian’s last quarterly report, for 4Q24. In that quarter, the company reported $1.73 billion at the top line, up more than 31% year-over-year and beating the forecast by $300 million. At the bottom line, Rivian ran a net loss – but the EPS of ($0.70) was 7 cents per share better than had been anticipated. In addition, the company reported a quarterly gross profit of $170 million.
During the whole of 2024, Rivian produced 49,476 vehicles and delivered 51,579 completed vehicles to customers.
Benchmark analyst Michael Legg sees Rivian in the early stages of an expansion, one that is likely to get a boost from the company’s fortuitous conformity to Trump Administration domestic manufacturing policies. He says of the company and its stock, “We expect a stronger delivery ramp in the second half of 2025 as industry expectations realign and hype for the R2 platform builds… We expect the macro environment to improve as the year progresses and both regulations and demand become clearer. While much attention has been given to incentives and loans relating to the EV industry, we believe RIVN’s DOE loan is aligned with the current administration’s desire to spur high-tech domestic manufacturing, creating 7,500 new manufacturing jobs in Georgia… We believe Rivian deserves a premium valuation due to its differentiated technology, software opportunities, unique products, strong management, and brand reputation.”
Legg quantifies his stance here with a Buy rating and a price target of $18, pointing toward a solid gain of ~36% on the one-year horizon. (To watch Legg’s track record, click here)
That’s the bullish take. Rivian’s stock has 22 recent Wall Street reviews, and the split of 6 Buys, 13 Holds, and 3 Sells gives the stock a Hold (i.e. Neutral) consensus rating. The shares are currently trading for $13.28 and the $14.09 average price target implies an upside of 6% in the year ahead. (See RIVN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
