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Investing.com - Stifel has reduced its price target on Rivian Automotive Inc (NASDAQ:RIVN) to $16.00 from $18.00 while maintaining a Buy rating on the electric vehicle manufacturer. According to InvestingPro data, the stock appears slightly undervalued at its current price of $11.98, with 10 analysts recently revising their earnings expectations downward.
The price target adjustment comes as Rivian faces several near-term challenges, including tariffs, the upcoming end of $7,500 EV tax credits, and production line downtime as the company prepares to launch its R2 vehicle. Despite these headwinds, InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 3.44, suggesting adequate resources to navigate near-term challenges.
Despite these headwinds, Stifel highlighted positive developments from Rivian’s second quarter, including strong Software (ETR:SOWGn) & Service profitability, reaffirmed 2025 deliveries guidance, and indications that R2 production costs would likely be about half those of the R1 model.
Negative factors influencing the revised outlook include a $22,000 sequential increase in cost of goods sold per unit due to lower production volumes, and adjusted 2025 EBITDA guidance worsening to between ($2.0) billion and ($2.25) billion from previous expectations of ($1.9) billion to ($1.7) billion.
Rivian also reduced its full-year regulatory credit sales forecast to $160 million from $300 million previously, and now expects full-year gross profit to be roughly break-even compared to earlier projections of a modest positive.
In other recent news, Rivian Automotive reported second-quarter revenue of $1.3 billion, meeting consensus estimates but surpassing Benchmark’s projection of $1.1 billion. However, the company experienced a gross profit loss of $206 million, which was worse than Benchmark’s forecast of a $135 million loss, attributed to lower production volume and under-absorption of fixed costs. Analysts have adjusted their price targets for Rivian in light of these results. TD Cowen reduced its price target to $13 due to industry headwinds affecting Rivian’s EBITDA and guidance. Piper Sandler also lowered its target to $14, citing concerns over electric vehicle demand. UBS further decreased its price target to $12, highlighting margin issues and an increased EBITDA loss forecast for 2025. Despite these challenges, Benchmark maintained a Buy rating with an $18 price target, while Cantor Fitzgerald kept a Neutral rating at $15, noting both positive partnerships and delivery guidance concerns. These developments reflect ongoing challenges and opportunities for Rivian in the electric vehicle market.
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