Rivian stock approaches double-digit gains as firm announces restructuring

Rivian stock approaches double-digit gains as firm announces restructuring
1 month ago
2 mins read

With the onset of 2022 and the global issues, it brought with it, electric vehicle (EV) makers were severely punished. 

Rivian (NASDAQ: RIVN), a once popular stock among analysts, has suffered large drawdowns to the tune of 69% year-to-date (YTD). Further, on July 11, the company discussed its restructuring plans, claiming that it has grown too fast and needs to cut roughly 5% of its workforce.

Moreover, Morgan Stanley (NYSE: MS) cut its coverage across the auto stocks on July 14, citing headwinds and slower-than-expected growth. Despite MS cutting their estimates by 5% to 10%, the cuts are generally smaller than in previous recessionary scenarios. 

Meanwhile, Rivian’s models, especially the R1S SUV is expected to be a popular choice among EV SUV drivers. In combination with the company’s contract with Amazon (NASDAQ: AMZN) for truck deliveries, the momentum may swing in their favor, once supply chain issues are behind them. 

RIVN chart and analysis 

Over the last month, RIVN is up 8.7%, currently showing a bull flag pattern, which occurs when prices pull back slightly after a strong rise up. The long-term trend is still negative, but the short-term trend is positive, with investors possibly keeping a closer watch on the stock.

For now, the support line is at $27.01, while resistance resides in the zone between $31.77 and $32.35.

RIVN 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

Analysts rate the shares a moderate buy, predicting that the average price the stock could reach in the next 12 months is $50.87, 60.98% higher than the current trading price of $31.60. 

Wall Street analysts’ price targets for RIVN. Source: TipRanks  

Recovery of auto stocks may, in fact, be protracted if the supply chain issues continue pressuring all aspects of the economy. 

Furthermore, rising interest rates and a possible recession could further exacerbate the issues the auto industry is facing, so investors may expect more volatility in the near term.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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Dino Kurbegovic

Dino is an investor and technology enthusiast with years of experience in managing complex projects. At Finbold he covers stories on stocks, investing, micro and macroeconomic trends. Also, he’s also building a micro solar power plants in his hometown.