Rivian Analyst Takes Down Price Target By Over 30%: Why EV Maker's Underperformance Is Positive For GM, Ford, Tesla

Rivian Automotive Inc. RIVN reported disappointing revenue for the fourth quarter and guided 2023 deliveries below consensus expectations.

The Rivian Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating but reduced the price target from $37 to $25.

The Rivian Thesis: Rivian’s quarter was mixed but investors were more concerned about the 2023 production guidance, Ives said in a note. The analyst said the company is plagued by a myriad of production issues at its main factory in Illinois and provided softer guidance of 50,000 for 2023.

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“While this is a massively complex operation in Normal, IL it is disappointing that 18 months later Rivian remains in this spider web of production issues,” the analyst said. This will worry investors that customers may gravitate to rivals such as General Motor Corp. GM, Ford Motor Co. F and Tesla Inc. TSLA as reservations get pushed out, he added.

As time ticks, the cash burn situation puts more pressure on Rivian in 2024/25, forcing it to consider raising more capital, Ives said.

“We still strongly believe in the Rivian long term story, however, last night was not what the bulls were hoping for.”

Price Action: In premarket trading, Rivian shares were sliding 8.66% to $17.63, according to Benzinga Pro data.

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