The hits keep coming for
Rivian Automotive
investors in the wake of its disappointing fourth-quarter earnings report.
UBS analyst Joe Spak downgraded shares to Sell from Buy on Friday.
That’s a double downgrade. Wall Street typically cuts ratings one notch at a time—going from Sell to Hold, from Hold to Buy, and vice versa. Things have to change significantly to jump over one rating.
“We had been optimistic on Rivian’s product and brand ultimately winning out,” wrote Spak. “But a rapidly changing EV backdrop causes us to reassess.”
Demand growth for battery-electric vehicles in the U.S. is slowing amid a dearth of affordable options and a glut of expensive options. A Rivian R1S SUV starts at about $75,000.
Spak now sees Rivian’s 2025 deliveries coming in at about 75,000 units. The Wall Street consensus, according to FactSet, is about 95,000. Spak cut his price target to $8 a share. His old price target was $24.
The move had Rivian stock down 2.7% in premarket trading Friday at $11.14 a share.
S&P 500
futures were flat.
Nasdaq Composite
futures were up about 0.1%. The drop came after Rivian shares fell almost 26% in Thursday trading following Wednesday evening’s fourth-quarter earnings report.
In the release, Rivian management said it expects to make about 57,000 units in 2024. Wall Street was looking for closer to 66,000. Rivian made just over 57,000 vehicles in 2023.
The downgrade comes about a day after J.P. Morgan analyst Ryan Brinkman downgraded shares to Hold from Buy. His price target went to $11 a share from $20.
Overall, now 57% of analysts covering Rivian stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. Three months ago, the Buy-rating ratio was almost 70%.
The average analyst price target for Rivian stock is now about $19.30 a share, according to FactSet. The average price target was almost $25 a share before the earnings report.
Write to Al Root at [email protected]
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