Shares of Rivian Automotive (RIVN) are sinking in today’s trading. This comes after Baird analyst Ben Kallo cut his price target for the EV maker from $18 to $16 per share due to limited catalysts for 2025 and a weaker-than-expected demand outlook for electric vehicles. Baird’s revised price target was derived by using an 11x multiple of its 2028 EBITDA estimate.
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While the firm remains positive about Rivian’s brand and long-term potential, it pointed out that near-term concerns, such as disappointing Q3 results and a reduced production outlook, limit Rivian’s ability to offset fixed costs.
In addition, although Rivian’s joint venture with Volkswagen (VWAGY) and funding from the Department of Energy were seen as positives, Baird noted these events are now “in the rearview.” With few new drivers for growth and expectations of sluggish EV sales in 2025, the firm believes Rivian’s stock will likely struggle in the near term.
EV Incentives Are Another Headwind
Adding to Rivian’s headwinds is the political landscape. Analysts point to President-elect Donald Trump’s anticipated rollback of EV incentives, including the $7,500 federal tax credit, as a potential drag on future demand. Although some Rivian models currently qualify for a $3,750 credit, cuts to incentives could make EVs more expensive for buyers and further dampen sales growth in the coming year.
Is RIVN Stock a Buy or Sell?
Overall, analysts have a Moderate Buy consensus rating on RIVN stock based on 10 Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 43% decrease in its share price over the past year, the average RIVN price target of $15.05 per share implies 9% upside potential.
