It hasn’t been a pleasant year for electric vehicle (EV) companies, and Rivian (NASDAQ:RIVN) is no exception. RIVN stock is down by nearly 50% this year in the midst of declining demand and price wars among competitors.
Rivian reported its earnings last week, revealing that it would lay off about 10% of its staff. The company also guided for the production of 57,000 vehicles in 2024. That’s significantly lower than the analyst estimate for 81,700 vehicles. Rivian produced 57,232 vehicles in 2023, meaning that there would be no production growth in the following year.
“We firmly believe in the full electrification of the automotive industry, but recognize in the short-term, the challenging macro-economic conditions,” said CEO RJ Scaringe.
Meanwhile, revenue tallied in at $1.32 billion, which beat the analyst estimate. However, analysts were less than pleased with Rivian’s overall numbers.
RIVN Stock: Truist Slashes Price Target to $11 From $26
This morning, Truist Securities analyst Jordan Levy dropped his RIVN stock price target to $11 from $26, representing a 57.69% decline. The analyst also lowered his rating to “hold” from “buy.”
While the Street was expecting a median production of 66,000 vehicles for 2024, Levy had a much lower expectation of 64,000 vehicles. Even that expectation wasn’t met. The disappointing guidance is partly attributed to a planned shutdown of Rivian’s facility in Normal, Illinois, during Q2 for an upgrade. The upgrade is expected to improve production rates by 30%.
“Further, while we remain believers in the long-term penetration of EVs, we expect that customers waiting on R2 coupled with persistently high interest rates and geopolitical uncertainties could act as headwinds to demand in the 2024/2025 timeframe ahead of RIVN’s next vehicle launch,” said Levy.
This year, Levy is focused on margin improvements for the R1 vehicles and the Electric Delivery Van (EDV). Higher margins will ultimately contribute to profitability.
Two other firms lowered their RIVN price targets this morning. Stifel dropped its target to $18 from $23 while maintaining a “buy” rating. And Barclays lowered its target to $12 from $16 while maintaining an “equal weight” rating.
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.
