Mario Tama
Rivian Automotive (NASDAQ:RIVN) dropped 14.20% after the EV maker’s full-year outlook rattled investors and analysts.
On Wall Street, Morgan Stanley cut its price target to $26 from $28, while keeping an Overweight rating.
Analyst Adam Jonas said that RIVN’s Q4 showed improvement in cost control, but the FY23 guidance on production, gross margins, and cash consumption disappointed. The firm see FY23 as a pivotal year for RIVN to show it can achieve a path to gross margin breakeven in FY24.
Wells Fargo said it is skeptical of Rivian’s (RIVN) new target of positive 2024 gross margins. Cash burn was also called a growing concern given the slow ramp. The firm stuck with an Equal-weight rating on RIVN and price target of $18.
Meanwhile, Wedbush Securities reeled in its 12-month price target on Rivian (RIVN) to $25 from $37 to reflect the slower growth trajectory. Analyst Dan Ives said Rivian is making progress and will learn from their manufacturing issues going forward with demand that still appears to be holding up, but warned the cash burn situation at Rivian puts more pressure on the 2024-2025 timelines with more capital raises not out of the question.
Elsewhere, Baird cut its price target to $35 from $44, D.A. Davidson dropped its PT to $16 from $23 and RBC Capital lowered its PT to $28 from $50.
On Seeking Alpha, contributor Bill Maurer presented the update bear case on RIVN and contributor JR Research outlined why investors can still be bullish.
During the earnings call, Rivian (RIVN) execs said supply chain issues could linger in the first half of the year before alleviating in the back half. Read the full earnings call transcript.
