Rivian Sees Price Target Halved At Wedbush: Analyst Sees Potential But It's Time To 'Stop The Excuses'

Rivian Automotive Inc RIVN has the potential to be a major electric vehicle stalwart over the next decade but it needs to start delivering models and "stop the excuses" to reach that goal, Wedbush analyst Dan Ives said on Wednesday as he halved his price target on the stock.

The Rivian Analyst: Ives has maintained an ‘outperform’ rating on Rivian, saying it is a long-term winner in the electric-vehicle segment and cut the price target to $30 per share from $60 to reflect a lower multiple and reduced numbers.

The Rivian Thesis: The electric vehicle startup has been a “train wreck” since its IPO last year and an overall “black eye” for the EV industry, the analyst said, adding that it still has the potential to change the EV and auto industry.

“The company's communication with the Street has been a case study for what NOT to do and every quarter it's been one thing after another besides the debacle price increase soap opera,” Ives, who is known for his bullish stance on EV market leader Tesla Inc. TSLA, wrote in a note, adding that Rivian finally seems to be on the right track.

“With over 90,000 pre-orders...we hope Rivian management can turn this ship around and begin to properly deliver to what the Street once envisioned.”

Rivian’s Q1 Performance: Irvine, California-based Rivian on Wednesday reported first-quarter numbers after market hours. It maintained its production forecast of 25,000 vehicles for 2022 and said supply-chain problems are expected to ease later this year. 

Rivian reported $95 million in revenue and net loss of $1.6 billion for the three months ended March 31.

The EV startup’s cash burn ballooned to $1.5 billion in the first quarter due to higher R&D and SG&A spending. 

Morgan Stanley analyst Adam Jonas had on Tuesday estimated Rivian could burn $7 billion in cash this year and could raise an additional $3 billion of capital by the year-end to fund its “extraordinarily capital intensive” production ramp-up,

Rivian said it expects losses to narrow as it ramps up production at Normal, a facility that can make 150,000 vehicles a year. Rivian said it produced 2,553 vehicles and delivered 1,227 in the first quarter and had $17 billion in cash.

The EV maker had in March cut its 2022 production forecast to 25,000 vehicles, citing supply-chain and logistical difficulties. 

Price Action: Rivian closed 9.6% lower at $20.6 on Wednesday and were trading 6% higher after the bell.

Photo: Courtesy of Rivian