Analysts like what they’re seeing from Rivian , but still expect a long road ahead for the company. The electric vehicle maker reported a smaller-than-expected quarterly loss Tuesday and raised its production guidance for 2023. Rivian now expects 52,000 vehicles this year, up from an original estimate of 50,000. The stock is up 2.1% in premarket trading. RIVN YTD mountain RIvian in 2023 But while analysts noted Rivian is on the right track, they still see headwinds that can keep the stock price at bay. “RIVN is working through bottlenecks with operating leverage and lower write-downs,” Morgan Stanley’s Adam Jonas said. “Investors will focus on bolstering the $10bn cash pile and exploring the scope for more strategic tie-ups.” Jonas reiterated his overweight rating on the stock. However, his price target implies 3% downside from Tuesday’s close. Goldman Sachs analyst Mark Delaney is neutral on Rivian. He raised his price target to $23 from $18, but that still implies downside of 7.3% over the next 12 months. “While we believe Rivian is one of if not the best positioned among EV OEM start-ups, we remain Neutral rated on the stock given the long path to profitability (and price competition in the broader market) and ongoing cash use (FCF was negative $1.6 bn in 2Q),” Delaney said. JPMorgan’s Ryan Brinkman is also neutral on Rivian stock, albeit with a $19 per share price target. Brinkman’s forecast implies roughly 23% downside. Brinkman added that the firm remains little changed on Rivian “on account of our largely unchanged out-year estimates which had already declined in part because of an expected lower pricing environment for EVs in North America following Tesla’s recent dramatic price cuts.” Bank of America’s John Murphy is more sanguine on the electric car maker, however. The analyst reiterated a buy rating on Rivian stock with a $40 per share price target, equating to about 61% upside from Tuesday’s close. The analyst added that liquidity appears to be less of an issue than previously thought for the company, underpinning his higher estimates. “RIVN continues to see negative gross margin for the year, but gross margin should inflect positively some time in 2024 as volumes/capacity utilization continue to ramp,” Murphy said. “Ultimately, we think this will prove conservative. Capex projections have been cut to $1.7bn from prior $2.0bn for 2023.” — CNBC’s Michael Bloom contributed to this report.
