Just a week ago, we brought out news that electric vehicle maker Rivian (NASDAQ:RIVN) slipped on a downgrade at Piper Sandler. That would not be the last of the analyst downgrades, however, as more hit during Monday’s trading session. The downgrades weren’t enough to dissuade investors, however, as Rivian was up fractionally in the session.
Word from Battle Road Research, via analysts Jonathan Rowe and Ben Rose, cut Rivian’s rating from its previous Hold down to Sell. What prompted the cutbacks? The most elemental of causes, the analysts noted. Notably, “…internal challenges and sector-wide struggles.” With Rivian on track to spend about $6 billion in 2023—roughly half of the $12 billion in cash on hand it had in 2022—the picture doesn’t look good. It’s already cut its workforce by around 6%. Normally that would be good news, but Rivian already missed its production goals for 2022, and the job doesn’t get done without a workforce.
It gets worse for Rivian, though. RBC Capital cut its rating from “outperform” to “sector perform” and slashed the price target in half, going from its original $28 to its new $14. Analyst Tom Narayan revealed that Rivian had “…limited catalysts to accelerate profitability…” and also that “…margins will remain constrained.” Given what’s been going on in the electric vehicle space of late, it’s no real surprise that individual companies are in a tight spot. When Tesla (NASDAQ:TSLA) can relentlessly cut prices over a year’s time, smaller firms have little choice but to do likewise to even try and keep up.
Analysts are somewhat split over Rivian’s likely future, however. Analyst consensus currently calls Rivian stock a Moderate Buy, with 11 Buy ratings balanced against six Holds and one Sell. Further, Rivian stock offers 111.25% upside potential thanks to its average price target of $26.11.
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