Rivian has few catalysts in 2024 past its new SUV, however longer-term story is unbroken, analysts say

The corporate stated it could make 57,000 EVs this 12 months, in contrast with the 57,232 EVs produced in 2023. Wall Avenue estimates for 2024 manufacturing hover round 66,000 autos to 68,000 autos.

The corporate plans to chop operational prices and apply what it has realized to its new manufacturing unit in Georgia, which is slated to begin manufacturing in 2026. 

Manufacturing steering “was underwhelming” with vital adjustments to its manufacturing facility forward, Kallo wrote in a observe to shoppers. The corporate has been upfront about its manufacturing points for a number of quarters and a quarterly lower was anticipated, he wrote.

Learn additionally: Rivian can’t keep away from the ‘EV winter,’ Barclays warns in downgrade of its inventory

“Nonetheless, the diploma of the influence was extra extreme than our/Avenue estimates, and we imagine will strain shares within the close to time period,” stated the observe.

The corporate has a number of areas for price reductions, and it’s investing for a powerful long-term setup. “We proceed to love the product, model, and administration, however are eradicating (the inventory) as a Finest Choose for 2024,” Kallo wrote.

Rivian’s inventory was down 27%, on observe to shut at a file low and likewise to notch its largest one-day share decline ever. The corporate stated excessive rates of interest and financial pressures had knowledgeable its outlook for 2024.

Regardless of the “uneven” outcomes and outlook, Rivian is “nonetheless in proper place/time with proper product/technique,” John Murphy with BofA Securities stated in his observe.

Murphy saved his purchase ranking on the inventory, saying it was based mostly on “our view that the corporate is among the most viable among the many start-up EV automakers with engaging product, stable long-term technique, and sufficient funding effectively into 2025.”

Mizuho analysts additionally caught with a purchase ranking on the inventory, however lowered their worth goal to $24 from $30.

The numbers are an additional signal that the EV honeymoon is over with headwinds in 2024 that embody the sundown of subsidies within the U.S. and Germany and a weaker client, wrote analysts led by Vijay Rakesh.

“Whereas we might observe Rivian is experiencing comparable macro headwinds to the remainder of the EV market, we see it as engaging with a superb product portfolio targeted on SUVs/Pickups whereas buying and selling at a steep 70%/40% low cost in comparison with friends Tesla/Lucid, respectively,” the analysts wrote.

Rivian is predicted to extend income by 13% in fiscal 2024 and by 69% in fiscal 2025, stated the observe. Manufacturing is predicted to ramp up, it has about $9.4 billion in money available and has a path to profitability within the fourth quarter of 2024, they wrote.

Rivian’s “tough quarter” arrange 2024 as a 12 months that “can now solely be a 12 months of ‘beating lowered expectations’ one quarter at a time,” Evercore ISI analysts stated of their observe. That’s among the many solely methods for the inventory to “regain any of its earlier momentum” regardless of the brand new EV reveal on March 7, they stated.

The R2 EV is a less expensive compact SUV and likewise be cheaper to supply. Rivian’s R1T pickup truck and the R1S full-size SUV begin at round $70,000 and $75,000.

Rivian wasn’t the one EV maker to supply disappointing manufacturing steering on Wednesday. EV startup Lucid Group Inc. 
LCID,
-19.86%
guided for 2024 manufacturing of solely about 9,000 autos, having produced 8,428 autos final 12 months.

Lucid’s inventory was down 20%. Tesla Inc.’s inventory
TSLA,
-0.59%
fell 1.2%.

Rivian’s inventory has fallen 41% within the final 12 months, whereas the S&P 500
SPX
has gained 24%.

Claudia Assis in San Francisco contributed.