Rivian (NASDAQ:RIVN) stock is the talk of Wall Street today after Needham lowered its price target on the electric vehicle (EV) maker to $13 per share from $18. According to the financial services company, the slashed outlook results from an evaluation of Rivian’s first quarter production and sales data and new model unveilings.
According to Needham analysts, the new price target is the product of a lower valuation multiple on its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast for 2028. Indeed, Needham foresees headwinds for Rivian due to a slow EV adoption before the release of its upcoming R2 model.
That said, Needham remains confident in Rivian, citing that its pricing resilience for its R1S used vehicles has been notably better than expected. The company also hasn’t experienced quite the same drop in demand felt by other EV makers recently.
Needham also strongly opposes Rivian’s decision to hold off on expanding its Georgia manufacturing plant to reduce capital spending.
Despite the reduced price target, Needham maintains its “buy” rating on RIVN stock.
RIVN Stock Climbs Despite a Price Target Cut
Despite the lower valuation, Rivian stock is enjoying a strong day in the market so far. Indeed, RIVN is up about 1% heading to the bell, though that won’t do much to reverse the company’s otherwise disappointing year.
Indeed, RIVN stock is down 58% year-to-date, trending around its lowest level ever. Not alone, other former darlings like Tesla (NASDAQ:TSLA) and Nio (NYSE:NIO) are also down big so far this year in an outright brutal selloff for EV makers.
Needham still has some confidence in Rivian, however. At its current price of $8.80 per share, Needham’s $13 price target implies a nearly 50% upside. Other analysts are even more bullish on RIVN, with the average analyst price target hovering around $16.50 a share.
On the date of publication, Shrey Dua 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.
