Truist Securities analysts revised Rivian Automotive’s (NASDAQ:RIVN) rating from Buy to Hold while cutting their price target to $11.00 from $26.00.
The analysts pointed out that the anticipated shutdown of Rivian’s Normal facility for upgrades during the second quarter is expected to have a greater impact than initially thought. The company’s forecast for producing 57,000 vehicles in fiscal 2024 falls significantly short of both Truist’s and the wider market’s expectations, which were set at 64,000 and 80,000 vehicles, respectively. This adjustment suggests no year-over-year growth, despite some estimates being notably higher, with a median expectation of 66,000 vehicles.
Management indicated that this shutdown will lead to a multi-quarter slowdown in R1 production. Additionally, a supplier issue in the first quarter is expected to delay the completion of several thousand vehicles until the end of the quarter, with a resolution anticipated by April.
The analysts also noted potential challenges for Rivian in the near to medium term, including the delay of the R2 vehicle, high interest rates, and geopolitical uncertainties, which could dampen demand until the next vehicle launch.