Analysts are rising cautious on Rivian shares as its struggles are worsened by weak electrical automobile demand. “Rivian reported a messy Q4 with worse FCF [free cash flow] vs expectations but more importantly issued 2024 production guidance well below consensus,” RBC Capital Markets analyst Tom Narayan wrote on Wednesday, reiterating a sector carry out ranking on the inventory. RBC has a $15 per share value goal, which is roughly 3% under Wednesday’s shut of $15.39. Shares of the EV maker had been buying and selling greater than 26% decrease on Thursday, after hitting a 52-week low intraday of $11.06. Traders had been dissatisfied to study Rivian would produce about 57,000 automobiles this yr, far under a consensus prediction of 80,500, in response to Barclays. Different estimates known as for manufacturing of 60,000 to 70,000 automobiles. RIVN 1D mountain Rivian inventory. The corporate reported blended fourth-quarter outcomes, with a wider-than-expected loss and income that was barely higher than anticipated.It additionally introduced plans to slash 10% of its salaried workers. The disappointing outcomes converse to a broader mixture of headwinds troubling EV makers. Shopper adoption has remained sluggish , harm by a wide range of causes together with increased rates of interest. On the identical time, Rivian is spending large on ramping up manufacturing of its R1S sports activities utility automobile and R1T truck, and plans to unveil the R2, a midsize SUV, this yr. Narayan stated legacy automakers are in a greater place to navigate the present slowdown in EV demand, and stated he expects Rivian inventory to “to come under pressure.” Rivian stated it misplaced $1.10 billion earlier than curiosity, taxes, depreciation and amortization, on an adjusted foundation, whereas analysts polled by FactSet anticipated EBITDA of -$1.06 billion. “We expect the stock to trade down given the 2024 EBITDA miss & still large gross margin loss per unit,” Wells Fargo analyst Colin M. Langan stated, as he reiterated an equal weight ranking. Langan lowered his value goal to $14 per share from $18. Langan additionally famous that Rivian’s money burn charge has ticked increased. He estimates that on the fourth-quarter tempo the corporate would run out of money in lower than eight quarters. Goldman Sachs analyst Mark Delaney additionally expects shares will stay below stress within the short-term. “We believe more difficult market conditions for EVs, including on pricing, will be a headwind in 2024 and an overhang on the stock, but we believe Rivian can still improve profitability over the course of the year as it benefits from material cost reductions and vehicle design improvements, as well as growth in software and services,” Delaney stated. The agency maintains a impartial ranking on the inventory and lowered its value goal to $13 per share, or about 16% under from Wednesday’s shut. It is prior goal was $17. “We believe progress with software & services, given Rivian’s electronic architecture that is over the air update-able and strong brand/growing installed base, will be a key factor in longer-term profitability,” he added. — CNBC’s Michael Bloom contributed to this report.
