Rivian's Pause Of JV With Merc Reflects Prioritization Of Cash Conversion Amid Uncertain Macros, Analyst Says

Morgan Stanley analyst Adam Jonas reiterated Overweight on Rivian Automotive, Inc RIVN with a $55 price target.
Rivian announced its plans to pause its JV with Mercedes Benz Group AG MBGAF MBGYY Vans three months after the companies entered a partnership to make electric vans in Europe.
Rivian said it would focus on its consumer and existing commercial business as it tries to become cash flow positive in its US operations.
"The pausing of this partnership reflects our process of continually evaluating our major capital projects while taking into consideration our current and anticipated economic conditions," Rivian CFO Claire McDonough said.
Jonas found Rivian's delaying of the Mercedes eVan plan consistent with a broader trend expected with more non-Tesla Inc TSLA EV players.
Despite Jonas's favorable outlook for this partnership, the analyst believed this announcement demonstrates Rivian's capital discipline as it reprioritizes projects to conserve cash and avoid raising additional capital heading into an uncertain macro environment next year.
Jonas believed hunkering down until FY24 could potentially offer Rivian an opportunity to secure additional funding under better economic and financial conditions.
Price Action: RIVN shares traded lower by 2.27% at $26.67 on the last check Monday.

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