When Rivian (NASDAQ:RIVN) released its 4Q23 results in February, the disappointing FY24 production guide helped send shares down by 26% in the subsequent session. With the EV maker slated to release its Q1 results today (Tuesday) after the close, that is obviously something investors will be hoping to see no repeat of.
Looking ahead to the print, according to Truist analyst Jordan Levy, there should be no big shockers in this readout.
“With 1Q production/delivery numbers previously reported, we expect few surprises in RIVN’s 1Q report,” Levy said. “With an extended shutdown currently ongoing to roll out new technology upgrades/other plant upgrades at Normal, we would anticipate FY24 guidance to be reiterated as we look for additional details surrounding incremental cost-downs/other drivers of margin improvement heading into the second half of the year.”
The current EV landscape is faced with a demand issue amidst intense competition, while sentiment has soured on this once-buzzy sector. Rivian stock has been hit particularly hard, showing year-to-date losses of 56%.
It hasn’t all been bad, though. There was welcome news for investors in March with the unveiling of the R2 platform along with the surprise introduction of the R3 (planned to follow the R2 and set to be a cheaper option) and the news the R2’s production will start in the existing Normal, Illinois facility rather than in the future Georgia plant (a costly endeavour so Rivian will be saving lots of cash). “However,” Levy goes on to add, “with R2 still 2+ years away/R3 even further and the company recently beginning a multi-week shutdown of the Normal plant, we see limited catalysts over the next couple quarters and expect the stock to remain range bound.”
The main focal point this year remains the gross margin profile, with Rivian expected show it can exit the year with GMs turning positive. More in the immediate term, on the earnings call, investors might also get to hear about a rumored partnership with Apple that was reported in the DigiTimes on Monday night.
For now, Levy remains on the sidelines with a Hold rating, while his price target goes from $11 to $10, indicating the shares have overshot by a modest 3%. (To watch Levy’s track record, click here)
Amongst Levy’s colleagues, 7 others join him on the fence with Hold ratings, but with an additional 12 Buys and 3 Sells, the stock claims a Moderate Buy consensus rating. The average price target is an upbeat one; at $16.91, the figure makes room for 12-month returns of ~64%. (See Rivian stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.