Rivian Vehicles 'Resonate With Customers,' But... This Analyst Is Revising His Forecast

Shares of Rivian Automotive Inc RIVN tanked in the premarket session on Thursday, trading on Wednesday, after the company reported lower-than-expected earnings for the fourth quarter.

While Rivian Automotive is likely to be a winner in the internal combustion engine (ICE) to electric vehicle (EV) transition, there is “heightened uncertainty” around R1 production in 2024, according to Needham.

The Rivian Automotive Analyst: Chris Pierce maintained a Buy rating on Rivian Automotive, while reducing the price target from $22 to $18.

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The Rivian Automotive Thesis: Although the company “headily exceeded” the 2023 production of 50,000 vehicles, “it's more difficult to view initial '24 guidance from a conservative posture given the updated demand commentary,” Pierce said in the note.

There is evidence of Rivian Automotive’s vehicles “resonating well with end-users, but the R1 bridge to the '26 launch of the TAM-expanding R2 vehicle looks less sturdy on increased demand concerns,” the analyst wrote.

The consensus had taken into account the complexity around the R1 line shutdown and re-ramp, the complexity issue “is still an overhang, with demand a new overhang even if RIVN successfully navigates manufacturing changes,” he added.

“We lower our '24 delivery estimate, but raise our adj EBITDA estimate on cuts to our OPEX and capex forecasts that reduce liquidity needs,” Pierce further stated.

RIVN Price Action: Shares of Rivian Automotive declined by 18.97% to $12.47 in premarket trading on Thursday.

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