By Senad Karaahmetovic
Mizuho analysts slashed price targets on three electric vehicle (EV) makers to reflect consumer headwinds that are building into 2023.
The analysts slashed the price target on Tesla (NASDAQ:TSLA) to $285 from the prior $330 per share, while new price targets for Nio (NYSE:NIO) and Rivian (NASDAQ:RIVN) are $28 and $50 per share (from $34 and $58), respectively.
"We see a challenging Auto end-market globally into 2023E, driven by high interest rates, energy prices and financing rates affecting affordability, that could overshadow a more constructive auto production outlook as supply chains and production bottlenecks ease. While EVs should continue to grow, high prices and a stretched consumer could be real headwinds," they wrote in a note to clients.
Still, the analysts reiterated Buy ratings on all three EV makers despite cutting PTs, as well as slashing 2023-24 production estimates for Tesla and Rivian. Out of these three companies, they prefer Rivian for the near term.
"We see RIVN best positioned with production ramping, large exposure to US SUV market, and also a ~32% discount to TSLA on our C24E P/S," they added.
Separately, Cantor Fitzgerald analysts initiated research coverage with an Overweight rating and a $30 per share pierce target.
"We believe RIVN benefits from a differentiated product offering, a strong backing from Amazon, and a proprietary charging network. RIVN's shares are down ~79% YTD, so we believe this could be a good entry point for new investors," the analysts wrote in a note.