Much like the rest of the electric vehicle (EV) industry, Rivian (NASDAQ: RIVN) has been struggling in recent months, and its shares have been – for the most part – dropping on the stock market in nearly every commonly-used timeframe.
Indeed, the firm is down 13.69% in the last 52 weeks, 22.61% since January 1, and 8.36% in the last 30 days. Still, Rivian has been trading with significant volatility and has managed multiple impressive trading days.
For example, RIVN rose 8.87% in the last 5 days as investors get for the firm’s next earnings report – scheduled for February 21, 2024.
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Throughout the last year, Rivian has given cause for optimism due to its skill in navigating the turmoil, mostly driven by increasing competition in the sector and relatively low demand for EVs, as well as its tendency to bear analyst earnings report estimates.
Still, it is worth remembering that while Rivian did rise in the short term, it remains an unprofitable company. Furthermore, while it did rise in the latest 5 sessions, a similar pattern can be observed with its U.S. competitors, including Tesla (NASDAQ: TSLA) and Lucid (NASDAQ: LCID).
Additionally, unlike its prominent competitors, Rivian declined in the last full trading session – Monday, February 12 – by 2.10% and closed at $16.33. It also continued declining in the extended hours and is, by press time, another 0.67% in the red in premarket trading.
Analysts turn sour on Rivian report
Rivian’s recent decline can mostly be attributed to the fact that Barclays analyst Dan Levy announced on Monday it is downgrading the stock from an “outperform” rating to an “equal weight” rating.
The decision was reached due to the expected harsh consequences of the decline in demand, which will, compounded by other pricing issues, likely hamper Rivian’s ability to turn a profit in 2024 and be reflected in the upcoming earnings report.
At the same time, Levy drastically slashed his price target for the EV maker from $16 per share to just $9 – a 43.75% decrease. The new target also constitutes an equally severe 44.89% downside from the press time price of $16.33.
Finally, the Rivian downgrade comes in the context of what the Barclays analyst has termed the “EV winter,” which is likely to have broader implications for the market and the effects of which are already evident with multiple companies – most prominently with Tesla’s stock which is down 24.27% since the start of 2024.
Analysts still bullish on Rivian long-term
Despite the recent trends, the majority of Wall Street analysts remain generally bullish on Rivian, judging by its retaining of the “moderate buy” rating on TipRanks and an average 12-month price target of $22.69 based on its performance over the last 3 months. Should the EV maker’s stock reach this target, it would rise 38.95% in the coming year.
Additionally, while there is an equal number of experts rating RIVN as a “buy” and a “hold” – 6 and 6 – and none recommend selling, at least among those represented on TipRanks, it is worth remembering that is not certain if Rivian is bound for a string of downgrades in the days leading up to its earnings report.
Similarly, while analysts appear generally bullish on the long-term prospects of the EV industry – most dramatically seen with the 90% upside forecast for Nio – it is uncertain if the sentiment will persist as the effects of the “EV winter” become more visible.
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