Wall Road cheered “indicators of enchancment” for Rivian Automotive Inc., however remained cautious in regards to the inventory on worries that the electric-vehicle maker nonetheless faces a steep manufacturing ramp.
Rivian
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late Wednesday reported a $1.7 billion third-quarter loss, but the stock rallied as the loss was narrower than Wall Street expected.
Gross sales got here in barely under expectations, and Rivian stored its manufacturing steering for the yr intact at 25,000 autos.
“We proceed to be followers of the truck, however not essentially the inventory,” Davidson analyst Michael Shlisky mentioned in a observe Thursday.
The “excellent news” on the decision was largely anticipated, the analyst mentioned.
The “sudden gadgets” that preserve Shlisky “cautious” embody Rivian’s push-out of its new automobile platform, the R2, to 2026 and “the sudden suspension of the disclosure of the preorder backlog.”
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Rivian mentioned it had greater than 114,000 preorders for its autos within the U.S. and Canada as of Monday, but it surely received’t report these numbers going ahead.
“(Rivian) additionally believes it has the money to hold all the way in which to 2025, however we imagine quite a bit has to go proper from right here,” Shlisky mentioned. The analyst stored the equal of a promote ranking on Rivian inventory.
Joseph Spak with RBC Capital struck a equally cautions tone. There have been “indicators of enchancment however (manufacturing) ramps aren’t clean,” Spak mentioned.
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The delay of the R2 platform launch might carry some “near-term noise,” Spak mentioned. The analyst lowered his worth goal on Rivian to $50, from $61, representing a 52% upside for the inventory from Thursday costs.
Suspending the R2 platform launch to 2026 could have been “unwelcomed information,” Emmanuel Rosner with Deutsch Financial institution mentioned, however Rivian is more likely to be “making the change to make sure applicable time to undergo the ramp-up section, permitting it to leverage learnings from R1 and (supply van) platforms.”
“All in, we imagine Rivian is exhibiting encouraging near-term operational traction and making proactive updates to capital allocation with the intention to protect money, which ought to proceed being welcomed positively by buyers,” the analyst mentioned. Its “progress on gross margin can also be significantly encouraging.”
Rosner stored a purchase ranking on the inventory and tweaked his worth goal to $43, from $44.
Dan Ives at Wedbush zeroed in on the manufacturing expectations for 2022, saying that Rivian “is navigating a really advanced provide chain in a powerful manner.”
“We’re cautiously optimistic that lots of the complications within the Rivian story are beginning to be within the rear view mirror,” Ives mentioned. “We imagine this story remains to be solely within the very early innings of enjoying out with the manufacturing piece now actually beginning to be in place heading into an important yr forward because the EV arms race performs out.”
Ives stored the equal of a purchase ranking on the inventory but additionally lowered his worth goal, going to $37 from $45.
Shares of Rivian have misplaced 69% this yr, in contrast with a decline of about 18% for the S&P 500 index.
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