BofA’s Hartnett says concentrated U.S. stock returns are likely to persist
On Monday, Cantor Fitzgerald maintained a Neutral rating and a $15 price target on Rivian Automotive Inc (NASDAQ:RIVN), close to InvestingPro’s Fair Value estimate. The stock has shown strong momentum with a 31% gain over the past six months, despite volatile trading patterns. Analyst Andres Sheppard highlighted the company’s first-quarter performance, noting that Rivian delivered 8,640 vehicles, a figure that slightly surpassed the Visible Alpha Consensus estimate of 8,217 vehicles. However, this number was lower than the 13,588 vehicles delivered in the first quarter of the previous year.
Rivian’s vehicle production for the quarter stood at 14,611 units, which exceeded Cantor Fitzgerald’s estimate of 13,750 vehicles. Looking ahead, Rivian has provided guidance for fiscal year 2025, projecting 46,000 to 51,000 vehicle deliveries. It’s important to note that this forecast falls short of the 51,579 vehicles Rivian delivered in fiscal year 2024. According to InvestingPro data, the company faces challenges with a -24% gross profit margin and rapid cash burn, though it maintains a healthy current ratio of 4.7.
The electric vehicle manufacturer is scheduled to report its earnings for the first quarter of 2025 on May 6, with an earnings call set for 5:00 PM ET. Market expectations are set around revenues of approximately $997 million and gross margins of roughly 1.8%. In the fourth quarter of 2024, Rivian recorded its first positive gross profit of $170 million, largely due to the sale of regulatory credits.
During the upcoming earnings call, analysts anticipate further insights into Rivian’s partnership with Volkswagen (ETR:VOWG_p), which involves a joint venture valued at approximately $5.8 billion. Additionally, updates are expected on the advancement of Rivian’s R2 line, which is expected to begin its start of production in the first half of 2026 and has an estimated starting price of around $45,000.
In other recent news, Rivian Automotive has strategically secured a reserve of electric vehicle batteries, collaborating with China’s Gotion High-Tech Co. and Samsung SDI (KS:006400) to bolster its supply chain against trade policy challenges. This proactive approach aims to mitigate potential disruptions due to tariffs and ensure a steady production flow. Meanwhile, Rivian has expanded its Board of Directors by appointing Aidan Gomez, an AI expert and CEO of Cohere Inc., highlighting the company’s focus on integrating advanced technology into its operations. Gomez’s experience with AI and his past work with Google (NASDAQ:GOOGL)’s deep learning project are expected to enhance Rivian’s strategic planning. In legislative developments, U.S. House Republicans have proposed a $250 annual fee on electric vehicles, which could impact Rivian and other EV manufacturers. This fee is part of a revised tax reform bill aimed at funding road repairs. On the financial front, Bernstein analysts have maintained an Underperform rating on Rivian, citing increased net debt and potential risks to the company’s balance sheet despite some positive revenue adjustments. The firm has set a price target of $6.10, based on a long-term view of Rivian’s sales projections for 2030.
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