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Lower than six months after its spectacular market debut, EV maker Rivian (NASDAQ:RIVN) is buying and selling at an all-time low, regardless of Wall Avenue analysts nonetheless score the inventory a purchase. Do you have to purchase the dip or keep away?
From IPO Darling to New Low
Since January, Rivian’s inventory has plunged 58%, considerably greater than its U.S. friends. As compared, Lucid (LCID) has fallen 33%, Fisker (FSR) 23% and Tesla 13%. The S&P 500 Index has slid 6%.
That stated, Rivian additionally fell from a excessive perch. Rivian shares rocketed following its preliminary public providing on Nov. 10. The inventory got here public at $78 per share in a deal that raised practically $12B and gave Rivian a market cap of roughly $67B. Backers of Rivian, which has centered on constructing “journey” EVs like pick-up vehicles and sports activities utility autos, embody Amazon and Ford.
Patrons stepped in instantly after the inventory’s debut. RIVN soared to a 52-week excessive of $179.47 on Nov. 26 however circled from there. The inventory has since tumbled to a 52-week low of $33.46 on March 15.
Shares had been notably onerous hit by the corporate’s This fall earnings report on March 10, which fell wanting expectations.
Additional spooking buyers was information that the corporate now expects to ship 25K autos in 2022, considerably fewer than the roughly 40k forecasted by analysts. Rivian administration attributed the shortfall largely to ongoing provide chain points for elements similar to semiconductors. For the 12 months 2021, the corporate stated it produced 1,015 autos and delivered 920.
Just a few days later, on March 14, Rivian introduced it had employed veteran auto govt Frank Klein as its new chief working officer. Klein was most lately president of Magna Steyr, the Austrian unit of contract auto manufacturing large Magna Worldwide (MGA), which counts Rivian rival Fisker as a shopper. Regardless of the announcement, Rivian shares hit an all-time low on March 15.
Is RIVN a Purchase?
Wall Avenue analysts, on common, nonetheless charge the inventory a Purchase. Of the 15 analysts tracked by SA, seven rated the inventory a Sturdy Purchase, 4 a Purchase, 4 a Maintain and none rated it a Promote. SA authors, in the meantime, charge the inventory a Promote, on common.
In notes issued after the corporate’s This fall earnings, analysts stated that whereas they had been considerably stunned by the magnitude of Rivian’s manufacturing shortfall, they remained optimistic about its future.
“Regardless of what appears to be a harder 2022 than initially envisioned, our Purchase score on RIVN is based on our view that the corporate is without doubt one of the most viable among the many start-up EV automakers and in addition a relative menace to incumbent automakers,” wrote BofA Securities analysts, who maintained their Purchase score on the inventory and worth goal of $140.
In the meantime, Barclays analysts maintained their Equal Weight score whereas it lowered their worth goal to $42 from $47.
“Rivian’s differentiated client branding centered round journey makes it distinctive within the EV market and gives a strong basis for recurring revenues,” wrote Barclays analysts. “We’re assured that RIVN can develop into a serious, multi-product OEM. As a lot of that is already priced in, we’re equal weight within the shares.”
Piper Sandler analysts had been additionally upbeat, sustaining their Obese score whereas decreasing their worth goal to $130 from $148.
“Rivian’s backlog and order charges are resilient, regardless of worth hikes, and if not for provide chain hiccups, Rivian can be able to constructing 50k models this 12 months,” wrote Piper analysts. “Backside line: provide chain issues are short-term; they don’t represent a motive to promote the inventory.”
Wedbush analysts, nonetheless, had been extra pessimistic, slashing their worth goal to $60 from $130, whereas sustaining their Outperform score.
“Since its IPO in late 2021, the Rivian story has been a foul episode out of the Twilight Zone for the Avenue,” Wedbush analysts wrote. “This EV pick-up truck/sport utility visionary story wants to begin its execution engines in 2022, in any other case competitors from Ford, GM, Tesla, and plenty of others will go after its potential EV buyer base into 2023.”
For a extra bullish tackle Rivian, learn SA contributor JR Analysis’s “Rivian Inventory Forecast: The place Is It Heading in 2022?” For a bearish view, flip to SA contributor Doron Levin’s “Keep away from Rivian Till EV Automaker Can Treatment Manufacturing and Provide-Chain Hassles.”
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