Rivian Automotive RIVN analysts are cautious on the short-term outlook for the electric vehicle company with supply chain concerns, after the company missed third-quarter revenue and earnings per share estimates.
The Rivian Analysts:
- Truist analyst Jordan Levy maintained a Hold rating on Rivian with a $12 price target.
- Wedbush analyst Daniel Ives maintained an Outperform rating with a $20 price target.
- Needham analyst Chris Pierce reiterated a Buy rating and lowered the price target from $18 to $14.
- Piper Sandler analyst Alexander Potter maintained an Overweight rating and lowered the price target from $21 to $19.
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Truist on RIVN: Proof of profitability for Rivian's R1 vehicle may be necessary to instill confidence in the R2 launch, Levy said in a new investor note.
"RIVN's third quarter results were mired by the company's previously reported component shortage, though a significant expected 4Q uptick in regulatory credit sales + realization of cost-down from Gen 2 models enabled the company to reiterate its 4Q positive GM (gross margin) target," Levy said.
The analyst said Rivian needs to demonstrate consistent profitability to help investors gain confidence.
Rivian's tailwind of resolving supply chain issues was not a surprise to investors, Levy added.
"While we are incrementally positive on the timeline reiteration for R2, we see the recent election results and the incoming administration being an overhang over the entire domestic EV market for the time being given the uncertainty."
Wedbush on RIVN: The electric vehicle company made progress and saw strong demand in the third quarter, but Ives said in a new investor note that there is more work ahead.
Ives said Rivian took two steps forward but one step back as the supply chain challenges hurt the company's plan to ramp up production.
"Rivian did not anticipate such large supply ramp challenges this quarter, however, it should be well sorted over the next few quarters as the company is still on track in terms of timing the R2 production launch," Ives said.
A supply partnership announced with LG on Thursday and the pending launch of the Volkswagen VWAGY joint venture are "critical pieces" for the future of Rivian, Ives added.
"Although we still remain confident in the long-term Rivian vision, it will take some serious strides for the company to regain trust in the short-term vision in the eyes of the Street."
Needham on RIVN: Scale and margins are bearish talking points for the Rivian story, Pierce said in a new investor note.
"We continue to view RIVN as a long-term winner in the eventual ICE to EV transition, leaning on its ability to create a brand and produce vehicles that drive high levels of customer passion and satisfaction," Pierce said.
The analyst said R2 production enhancements are the key focus for 2025 with R2 production set to begin in the first half of 2026. Vehicle profitability for the R2 is expected to be reached faster than the R1 and will be a key factor to watch, the analyst added.
The analyst also highlighted a joint venture with Volkswagen expected to close in the fourth quarter.
"RIVN's balance sheet has been significantly strengthened the Volkswagen announcement, removing any additional equity needs vs our prior model, allowing for a higher level of investor patience."
Piper Sandler on RIVN: The third-quarter results and commentary had no surprises, leading to increasing importance for the joint venture with Volkswagen closing as the next catalyst, Potter said in a new investor note.
"The stock has faltered recently, partially due to slower production, and partially (in our view) because a JV with Volkswagen has yet to be finalized," Potter said.
The analyst said the joint venture terms could continue to be a story in the coming weeks and could see Rivian's valuation expand.
"We will review our model once the JV terms are announced."
RIVN Price Action: Rivian stock is down 0.48% to $10.00 on Friday, versus a 52-week trading range of $8.26 to $24.62. Rivian stock is down 51% year-to-date in 2024.
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