On Tuesday, CFRA analyst Garrett Nelson reiterated a Sell rating on Rivian (NASDAQ:RIVN) Automotive Inc (NASDAQ:RIVN), maintaining a $8.00 price target. The firm's stance remains cautious, citing a lowered 2024 adjusted EPS forecast to -$4.35 from -$4.10, while keeping the 2025 projection at -$3.15. Rivian's second quarter vehicle deliveries surpassed its own guidance, reaching 13,790 units, an uptick from the 13,588 units in the previous quarter. However, production saw a decline, falling to 9,612 units from 13,980 units.
Despite the production dip, Rivian has kept its full-year production outlook at 57,000 units. This target suggests a substantial second-half production increase of roughly 33,400 units, marking a 42% rise from the first half's 23,600 units. The analyst expressed concerns over Rivian's ability to meet its full-year production goals and noted the opaque nature of the company's reservation count.
Rivian's stock experienced a significant rally following an announcement with Volkswagen (ETR:VOWG_p) last week. Nonetheless, CFRA remains skeptical that Rivian can achieve its gross margin objectives. The analyst believes the targets set by the company's management are overly ambitious.
In other recent news, Rivian Automotive Inc. has been a focal point of several analyst firms following its significant partnership with Volkswagen and impressive Q2 production and delivery figures. Truist Securities maintained a 'Hold' rating on Rivian, acknowledging the company's potential after surpassing production and delivery expectations, and achieving its Q2 targets. The company produced 9,612 vehicles and delivered 13,790 vehicles, indicating a positive trajectory towards its 2024 production target of 57,000 vehicles.
Several firms, including RBC Capital, Canaccord Genuity, and Needham, increased their share targets for Rivian following the announcement of a $2 billion deal with Volkswagen. RBC Capital raised its price target from $11.00 to $14.00, viewing the deal as a significant liquidity enhancement for Rivian. Similarly, Canaccord Genuity increased its shares target to $30.00, up from the previous $20.00, emphasizing the transformative potential of the Volkswagen collaboration.
Piper Sandler maintained its 'Overweight' rating on Rivian, highlighting the Volkswagen partnership as a pivotal move for the company. Similarly, Needham raised its price target for Rivian from $13.00 to $20.00, reflecting increased confidence in Rivian's gross margin assumptions following the company's detailed plans for cost savings. These recent developments underscore the analysts' confidence in Rivian's strategic partnerships and growth prospects, especially in light of its recent strategic initiatives with Volkswagen.
InvestingPro Insights
As Rivian Automotive Inc (NASDAQ:RIVN) navigates through its production and financial milestones, key metrics from InvestingPro provide a clearer picture of the company's current standing. Rivian's substantial revenue growth of 123.79% over the last twelve months as of Q1 2023 is a testament to its rapid expansion in the electric vehicle market. However, the company's negative gross profit margin of -40.63% during the same period highlights the challenges it faces in achieving profitability.
InvestingPro Tips suggest that while Rivian holds more cash than debt on its balance sheet, which is a positive sign of liquidity, the company is quickly burning through cash and has not been profitable over the last twelve months. Additionally, analysts do not anticipate the company will be profitable this year, mirroring CFRA's cautious stance. On the investment side, Rivian's stock price movements have been quite volatile, with significant returns over the last week, month, and three months, yet the stock has taken a considerable hit over the last six months.
For investors seeking a comprehensive analysis of Rivian's financial health and future outlook, InvestingPro offers additional insights, including a total of 13 InvestingPro Tips for Rivian. To explore these tips and gain a deeper understanding of Rivian's potential, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at https://www.investing.com/pro/RIVN.
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