Rivian stock (NASDAQ: RIVN) was hit hard by the market’s reaction to the April 2 tariffs. However, recent price action might provide investors with a long time horizon with quite an attractive entry point.
First, let’s backtrack and examine the pullback that has occurred. RIVN shares fell from $12.49 on the day of the announcement to $11.08 at press time in the pre-market trading session on April 4. This 11.28% drop has brought year-to-date (YTD) losses up to 16.69%.
Beyond ‘Liberation Day’, another contributing factor to the decline was the release of Rivian’s Q1 production and delivery figures. In the quarter ended March 31, the automaker delivered 8,640 vehicles and produced 14,611, roughly in line with or slightly above its own estimates.
However, the market reacted rather negatively to the news, seeing as deliveries fell by 36.4% compared to Q1 2024.
Cantor maintains ‘Hold’ rating for RIVN stock, but sees upside
Although short-term price action is negative, and further losses are to be expected on account of market-wide instability, one Wall Street analyst revised his outlook on Rivian stock on April 2, and his forecast implies a hefty upside.
Andres Sheppard of Cantor Fitzgerald maintained a ‘Neutral’ rating, equivalent to a ‘Hold’, on Rivian stock. The analyst also maintained a $15 price target, which, if met, would equate to a 35.37% rally from current prices.
In a note shared with investors, Sheppard cited the fact that deliveries beat both internal targets and analyst estimates as the key driver behind his decision. The researcher used a bottom-up 10-year discounted cash flow (DCF) model when determining his 12-month price forecast.
As ambitious a target as that might sound like at first glance, it is rather in line with Wall Street’s average outlook. Another tailwind is the fact that the business recently spun off its micro-mobility unit, allowing it to focus on core competencies and operations more effectively.
Despite the pullback, RIVN stock might end up benefiting from the tariffs in the long run due to a simple reason. Normal, Illinois, is home to Rivian’s only production facility, with another facility planned to open in 2028 in Georgia.
Moreover, a vast majority of the trucks, vans, and other vehicles sold by the company are sold in the United States, making core operations effectively immune to tariffs, even in the case of significant escalations in the present trade dispute.
Featured image via Shutterstock
