Rivian (NASDAQ:RIVN) has recently seen several positive developments. The company secured a conditional commitment for a loan of up to $6.6 billion from the Department of Energy (DoE) and finalized its joint venture with Volkswagen, which could yield up to $5.8 billion.
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Despite these advancements, the stock has returned to negative territory this week, and its year-to-date performance remains underwhelming. To wit, even after recent gains, the stock has shed 44% throughout the year.
In fact, Baird analyst Ben Kallo sees a lack of compelling catalysts on the horizon to reignite investor interest.
“With the Volkswagen JV having recently closed and DOE funding announcement (a positive surprise) in the rearview, we see few catalysts in 2025 and expect shares to languish with EV sales, which may be sluggish relative to expectations,” the analyst explained.
Still, Kallo isn’t writing Rivian off. He remains optimistic about its long-term potential, highlighting the company’s strong product lineup and brand power. However, driven by uncertainties surrounding the IRA and growth prospects in 2025, the analyst thinks the near-term landscape for EVs (including the supply chain) remains challenging, with Rivian likely to struggle.
Kallo also points out that Rivian missed both Baird and Street estimates on most important metrics in its Q3 readout, while the company also lowered its adj. EBITDA outlook for the full year.
“The reduced outlook is largely a function of RIVN’s previously lowered production outlook, which will limit its ability to leverage fixed costs,” the analyst went on to comment. Rivian is still aiming to turn gross profit positive in Q4 and that is an area Kallo recommends investors keep an eye on.
For now, though, Kallo has downgraded Rivian’s rating from Outperform (i.e. Buy) to Neutral and trimmed his price target from $18 to $16. Despite the lower target, the new figure still implies potential 12-month upside of 22%. (To watch Kallo’s track record, click here)
Overall, Rivian sentiment on Wall Street appears to be mixed. Based on an even split of 10 Buys and Holds, each, plus 1 Sell, the consensus view is that this stock is a Moderate Buy. Going by the $15.05 average price target, a year from now, investors will be pocketing returns of ~15%. (See RIVN 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.
