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Rivian Earnings Are Coming. Wall Street Is Cutting Price Targets in Preparation.

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The average analyst target price for Rivian is down to about $116 a share from $133 over the past month.

Courtesy Rivian

Electric truck maker


Rivian Automotive

reports fourth-quarter numbers on Thursday. Analysts are getting more conservative going into the earnings report.

On Tuesday, Barclays analyst Brian Johnson cut his


Rivian

(ticker: RIVN) price target all the way to $47 a share from $115. He kept his Hold rating on shares. Rising prices for just about everything led Johnson to cut his profit margins targets for the coming couple of years.

Rivian stock rose 2.1% to $43.32 in recent trading. The

S&P 500
and

Dow Jones Industrial Average
were down 0.4% and 0.2%, respectively.

Inflation is a problem for Rivian and everyone else. Nickel, for example, goes into some EV batteries and prices have shot up almost 100% over the past two weeks.

Inflation led Rivian to raise prices for its vehicles on March 1. The company tried to apply the price increase to reservations made before March 1 and investors revolted, sending shares down 13.5% the day new pricing was announced. Rivian backed off its price increase for older reservations, but the stock didn’t bounce. Shares fell another 11.5% after Rivian reversed part of its price increase.

Johnson isn’t the first analyst to cut his price target. The average analyst target price is down to about $116 a share from $133 over the past month. The average analyst price target was about $134 a share in December, shortly after the company completed its initial public offering of stock in November.

Recent analyst target price cuts reflect what has been going on with the stock. Coming into Tuesday trading, Rivian shares are down almost 60% year to date. They are down about 45% from their $78 IPO price.

Rising interest rates, inflation, and the Russia-Ukraine conflict has sapped some of the enthusiasm for the stock. The earnings report might help change the narrative surrounding Rivian, but it will take good production news to help change sentiment.

Analysts project the company will lose almost $2 a share from about $61 million in sales. But earnings and sales don’t matter all that much—Rivian just started delivering electric trucks.

Wall Street projects the company will deliver about 40,000 vehicles in 2022. Any guidance better than that might help the stock. Mizuho analyst Vijay Rakesh believes investors will want to see current production running at about 350 units a week right now, with first-quarter deliveries coming in at about 4,000 units. Those are two other numbers, along with any full-year guidance, investors can use to judge how Rivian’s production ramp-up is going.

Rakesh is a Rivian bull, rating Rivian shares Buy with a $145 price target.

Overall, the Street is closer in feeling to Rakesh than Johnson. Almost 70% of analysts covering the stock rate shares Buy. The average Buy-rating ratio for stocks in the

S&P 500
is about 58%.

Write to Al Root at allen.root@dowjones.com

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