Earlier this week, Rivian (NASDAQ:RIVN) reported its third-quarter production and deliveries. Production tallied in at 16,304 vehicles, while deliveries were 15,564 vehicles. The production figure was in line with Rivian’s full-year guidance of 52,000 vehicles. Many shareholders expect the company to lift this guidance during the company’s next earnings report on Nov. 7. Additionally, the delivery figure beat the analyst estimate for 14,000 deliveries by a wide margin.
Morgan Stanley didn’t adjust its $24 price target following the Rivian news. It lowered its price target to $24 from $26 last April. However, analyst Adam Jonas noted that the electric vehicle (EV) contender could be well-positioned to beat on headline numbers, gross margin and cash flow estimates in the upcoming quarters. He added that the frequency of Rivian vehicles on the street could boost sentiment and awareness of the brand. On the other hand, he cautioned that companies like Rivian “are not yet at the self-funding level of sales and margins.”
Morgan Stanley Says RIVN Stock Can Benefit From UAW Strike
Morgan Stanley also believes that Rivian could emerge as a beneficiary of the United Auto Workers (UAW) strike after a resolution is reached:
“If legacy auto makers pull back/push out their EV plans over the medium term, we could see market share potentially available for Rivian to tap into. Over the same period, we believe some legacy OEMs may fundamentally alter their EV strategies. Many of today’s internally funded organic efforts to develop EVs may need to be supplemented (if not replaced by) greater strategic cooperation with clean-sheet partners.”
Meanwhile, Goldman Sachs raised its price target to match Morgan Stanley’s at $24 following the production announcement. That implies upside of about 8% compared to the current price.
For the third quarter, analysts are forecasting revenue of $1.299 billion, which would imply year-over-year (YOY) growth of 142.41% and sequential growth of 15.91%. GAAP earnings per share (EPS) is expected to be a loss of $1.48. In fact, yearly GAAP EPS isn’t forecasted to be positive until 2030, while yearly adjusted EPS is forecasted to turn positive in 2028. That means that Rivian has a long road to cross until it can achieve profitability.
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.
