Why One Analyst Thinks Rivian (RIVN) Stock Is Worth Just $35

Shares of Rivian (NASDAQ:RIVN) are in the green today, despite a rough start to April. The electric vehicle (EV) manufacturer is down more than 10% month-to-date in the face of supply chain issues and inevitable interest rate hikes. Last week, the company reported producing 2,553 EVs and delivering 1,227 in Q1. In addition, Rivian stated that it is on track to meet its 2022 production guidance of 25,000 vehicles. However, RIVN stock received its first “sell” rating this morning from a major firm. As a result, shares declined as much as 3% in premarket trading before recovering.

The back of a silver Rivian (RIVN) pick-up truck.
Source: Miro Vrlik Photography / Shutterstock.com

Exane BNP Paribas Assigns RIVN Stock a $35 Price Target

Exane BNP Paribas analyst Dorothee Cresswell initiated coverage of Rivian this morning with a $35 price target. While Cresswell called Rivian a “serious brand w/true staying power,” the analyst also raised several concerns. For starters, Rivian recently raised prices for the R1T and R1S models by 19%. This suggests that the original pricing for the two EVs was “structurally unprofitable.” Furthermore, a “departed employee” disclosed profitability issues last year, along with “concerns over launch manufacturing & logistical readiness.”

Rivian currently stands to deliver “upwards of 80K units” based on 83,000 reservations as of March 8. Cresswell believes that these units will be delivered “at a price point ~20% below what it recently assessed acceptable.” The analyst adds that it will likely take until 2024 to complete these deliveries. As a result, Cresswell’s expected revenue for 2023 and 2024 is “9-13% below consensus.”

With Cresswell’s price target in mind, let’s take a look at how the rest of Wall Street views the EV company.

Wall Street Weighs In On Rivian

  • RBC Capital has a price target of $100. Analyst Joseph Spak was impressed by Rivian’s Q1 production figures and believes that production is ramping up. RBC’s internal data previously showed that Rivian was producing 320 vehicles per week. Based on Q1’s figure of 2,553 vehicles produced, Spak believes that Rivian was able to produce 348 vehicles per week during the last 23 days of the quarter.
  • Mizuho has a price target of $95. Analyst Vijay Rakesh believes that Rivian’s supply chain constraints will improve and deliveries will ramp up during the second half of the year. For Q2, Q3 and Q4, the analyst expects 3,700, 6,600, and 10,800 deliveries, respectively. For 2023, Rakesh expects 88,000 deliveries, raised from 86,000.
  • CFRA has a price target of $40. The firm raised its price target from $35 on April 6. Meanwhile, CFRA raised 2022 earnings per share (EPS) estimates to -$6.20 from -$6.40. In addition, 2023 EPS estimates were raised to -$5, while 2024 EPS estimates were raised to -$3.20.
  • Finally, Rivian has an average price target of $84.62 among 13 firms with coverage of the stock.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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