Rivian Shares Tumble As 2022 Production Outlook Disappoints

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Shares of electric vehicles manufacturer Rivian fell over 8% on Friday after the company cut its production outlook in half as surging input costs and supply chain bottlenecks continue to bite.

Irvine, California-based EV start-up warned that supply-chain problems could halve its planned production this year to just 25,000 vehicles. Net loss for the fourth quarter was $2.46 billion, or $4.83 per share, compared with a loss of $353 million, or $3.50 per share, from the year-ago period, Reuters reported.

The company’s reported revenue of $54 million, fell far short of analysts’ expectations of $60 million. Cash and equivalents amounted to $18.4 billion in the last quarter.

At the time of writing, Rivian stock traded over 8.0% lower at $37.82 on Friday, way below their IPO price of $78. The stock fell more than 60% so far this year.

Analyst Comments

Rivian is a well-capitalized pure EV start-up OEM that can leverage its strategic relationship with Amazon to derive scale and build software and services competencies for its consumer business. We forecast Rivian to sell 1.5 million BEVs annually in 2030 (801k Consumer / 653k Commercial). We forecast Rivian’s total revenues to grow at a 34% CAGR from 2025 to 2030,” noted Adam Jonas, equity analyst at Morgan Stanley.

Rivian’s software services business can grow from $641 million revenues in 2025, $7 billion in 2030 and $36 billion in 2040, as the installed base grows in size exponentially. We value Rivian at $147, 1.3x 2030 EV/Sales, expensive vs Auto OEMs but not versus software/tech companies and in-line with EV startups such as Tesla and Lucid.”

Rivian Stock Price Forecast

Twelve analysts who offered stock ratings for Rivian in the last three months forecast the average price in 12 months of $85.00 with a high forecast of $147.00 and a low forecast of $35.00.

The average price target represents a 119.47% change from the last price of $38.73. Of those 12 analysts, eight rated “Buy”, four rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price to $94 with a high of $200 under a bull scenario and $40 under the worst-case scenario. The investment bank gave an “Overweight” rating on the electric vehicles manufacturer’s stock.

Several analysts have also updated their stock outlook. Barclays cut the target price to $115 from $120. Deutsche Bank initiated with a buy rating and set the target price to $130. Mizuho initiated with a buy rating and set the target price at $145.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.

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This article was originally posted on FX Empire

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