Rivian Production Plant Puts 'Ceiling' On Stock, Analyst Says In Downgrade
Portfolio Pulse from Adam Eckert
Truist Securities downgraded Rivian Automotive Inc (RIVN) from Buy to Hold and cut the price target from $26 to $11 due to concerns over capital needs stemming from a planned multi-week plant shutdown. This shutdown is expected to impact production, with Rivian forecasting to produce 57,000 vehicles this year, below estimates of 81,000. The shutdown and weak production guidance have led to a revised revenue forecast for 2024, down from $6.2 billion to $4.3 billion, and an elongated path to positive free cash flow. Despite long-term optimism for Rivian in the EV market, the current risk/reward profile is seen as more balanced.
February 26, 2024 | 5:03 pm
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Truist Securities downgraded Rivian to Hold from Buy and reduced the price target to $11, citing concerns over capital needs due to a planned plant shutdown. This has led to a decrease in production forecasts and a revised 2024 revenue outlook.
The downgrade and price target cut by Truist Securities directly impact Rivian's stock as it reflects concerns over the company's short-term financial health and production capabilities. The planned plant shutdown is expected to limit vehicle production, leading to lower than expected revenues and an elongated path to profitability. This news is likely to negatively affect investor sentiment and the stock price in the short term.
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IMPORTANCE 90
RELEVANCE 100