On Monday, Barclays made an adjustment to the financial outlook of Rivian (NASDAQ:RIVN) Automotive Inc (NASDAQ:RIVN) shares, reducing the price target on the electric vehicle maker's shares to $12 from the previous $16. Despite this change, the firm has decided to maintain an Equalweight rating on the stock.
The decision to lower the price target comes amid observations of weakening demand for Rivian's products, as indicated by a softer order book. The company's guidance for 2024 volume production further suggests that it is facing demand challenges.
Rivian's management has reaffirmed their target to reach gross margin breakeven by the fourth quarter of 2024. However, Barclays sees potential challenges ahead for Rivian in meeting this goal, particularly due to pricing pressures in the market.
The analyst also emphasized the need for increased vigilance regarding costs. Given the current economic environment, such attention to cost control is deemed crucial for Rivian's financial health and ability to compete.
Lastly, the analyst highlighted the long-term opportunity represented by Rivian's R2 vehicle line. While the immediate focus remains on the present financial adjustments and demand concerns, the R2 line is seen as an increasingly important aspect of Rivian's long-term strategy and potential for growth. The reiteration of the Equalweight rating, alongside the lowered price target, reflects a cautious but not entirely negative outlook on the company's prospects.
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