Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Analysts cut ratings on Rivian Automotive as EV slump extends

Published 02/22/2024, 12:54 PM
Updated 02/22/2024, 12:57 PM
© Reuters Analysts cut ratings on Rivian Automotive (RIVN) as EV slump extends

Analysts have moved to downgrade the shares of Rivian Automotive (NASDAQ:RIVN) on Thursday as the slump across electric vehicle stocks continues.

Electric Vehicle Stocks Decline

Shares of RIVN have declined more than 25% after the company's disappointing earnings release after the close on Wednesday. The company's production guidance also missed expectations when it said it would reduce its salaried workforce by around 10%.

Another EV company, Lucid Group, also forecast production below analyst expectations, with its share price declining more than 16% Thursday.

The misses in production guidance show the signs of a slowdown in electric vehicle demand has not yet slowed, which has also been noted by other companies in the sector, such as Ford and GM.

JPMorgan Downgrade

Reacting to the Rivian results, JPMorgan analysts said there are concerns surrounding the company's backlog, growth, pricing, and margin. They downgraded the stock to Underweight from Neutral, lowering the price target to $11 from $20 per share.

"We are downgrading shares of Rivian Automotive (RIVN) to Underweight from Neutral after slashing our estimates and price target to account for substantially slower growth amidst continued large losses," said the investment bank's analysts.

"The company has fallen far short of its own targets for vehicle sales and production, let alone the seemingly much more ebullient expectations of its investors, and disappointing new guidance revealed yesterday implies essentially no growth in 2024 (in our view strongly hinting at growing

demand problems that leave little likelihood for a re-acceleration of growth until at least 2026)," they added.

CFRA Cuts Rivian to Sell

Elsewhere, CFRA Research also downgraded shares of Rivian to Sell from Hold, slashing their 12-month price target for the stock to $10 from $20 per share.

CFRA said the electric vehicle company's earnings miss was driven by higher-than-expected costs, as revenue of $1.32 billion came in $60 million ahead of consensus.

"From our perspective, RIVN's adjusted EBITDA guidance is mere wishful thinking, as it implies it can cut its 2023 EBITDA loss by about $1.4B this year despite lower volumes," wrote CFRA. "Unfortunately, there's little RIVN can do to improve its near-term financial performance absent stronger demand."

Latest comments

Record manipulation in the US Miracle Market, greatest financial FRAUD in history, and biggest investment JOKE in the world.
OMG
Headlights on these Rivians are terrible looking.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.