Rivian (NASDAQ:RIVN) stock is in focus after Barclays analyst Dan Levy dropped his price target to $25 from $27 while maintaining an “overweight” rating. Levy is ranked at 3,408 among 8,686 analysts tracked by TipRanks with a success rate of 43% and an average one-year return of 2.2%.
Levy appears to be losing confidence in Rivian, as shares of the company have declined by more than 20% so far this year. In mid-November, the analyst had stated that RIVN stock was at an attractive entry point. RIVN is down by about 7% since then.
Levy even picked Rivian as the closest electric vehicle (EV) startup to industry leader Tesla (NASDAQ:TSLA) back in February 2023.
“We are hard-pressed to see any company in the auto landscape as the ‘next Tesla,’ as Tesla has been quite unique in its accomplishments. That said, if we were to identify any of the start-up EV automakers as the closest to Tesla, we believe it would be RIVN,” said the analyst.
RIVN Stock: Barclays Cuts Price Target to $25
Barclays’ price target is now in-line with the rest of Wall Street. Shares of Rivian carry an average price target of $25.44 per share among 25 analysts with coverage of the stock. That implies upside of about 63% from current levels.
Barclays isn’t the only firm to recently lower its RIVN stock price target. Deutsche Bank analyst Emmanuel Rosner lowered his price target to $19 from $29 while downgrading shares to “hold” from “buy” on Jan. 17. The analyst’s price target is based on a 1.2x multiple of expected 2026 sales, down from 1.8x.
Rosner is cautious about expectations concerning the company’s production and gross margins this year. He expects production of 65,000 vehicles in 2024, in stride with a slow ramp-up and factory shutdowns.
Rivian’s management had forecast positive 2024 gross margins in early 2023, although Rosner believes that this may not be the case. Instead, he believes that management could change their guidance to reflect positive gross margins later on during the year, which would still result in negative gross margins. He attributes this hypothesis to technology integration costs for the R1 lineup in the second quarter and Q3.
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.
