Cantor Fitzgerald downgraded Rivian Automotive Inc (NASDAQ:RIVN) to a Neutral rating (from Overweight) and raised their 12-month price target on the stock to $29.00 (from $27.00) ahead of the automaker’s 2Q earnings report on recent outperformance in the share price and on increased competition.
Analysts wrote in a note, “With the recent surge in share price, and since Rivian's stock has increased more than 49% YTD and traded up to $27 (our PT prior to this note), it now appears properly valued, and thus we are becoming more conservative in the short term.”
Rivian preannounced on July 3rd that the company had produced 13,992 vehicles (vs. estimates of 10,945) and delivered 12,460 vehicles (vs. estimates of 10,752) in 2Q23. This was a strong quarter, both relative to Cantor Fitzgerald’s estimates and vs. consensus.
The electric automaker also reaffirmed its FY23E Annual Production Guidance, aiming to manufacture 50,000 units. With 23,387 vehicles already produced and 20,406 delivered, Rivian seems to be on a promising path to achieve its annual production goal, especially considering the typical strength of the 4th quarter due to seasonal factors. Consequently, Cantor Fitzgerald revised their FY23 production estimate to 54,000 units, up from the previous estimate of 49,750 units.
Rivian will release its full 2Q23 financial results on August 8th, where they will be focused on the company’s revenues for the quarter, and commentary around ASPs, gross margins, cost savings through the new Enduro motor and new battery pack, as well as additional information regarding Amazon's (NASDAQ:AMZN) agreement and exclusivity.
Although Rivian seems to be ending its exclusivity with Amazon, the e-commerce giant still holds the largest stake in the company, currently at approximately 17%. Moreover, the Electric Delivery Vans agreement is anticipated by Rivian's management to contribute around 20% to the company's revenue for the current year.
Shares of RIVN are down 1.56% in pre-market trading on Tuesday.