Rivian (NASDAQ:RIVN) shares experienced a 4% increase on Tuesday, as revealed by Akiko Fujita on Yahoo Finance Live. This uptick followed an upgrade in rating by UBS Analyst Joseph Spak from "Neutral" to "Buy", signaling increased confidence in the electric vehicle manufacturer's future prospects.
This positive market response comes in the wake of a 20% drop in Rivian's stock since Monday of last week. The company has been grappling with fundraising efforts, issuing a $1.5 billion green convertible note to bolster its financial position. In line with this, InvestingPro data shows a significant -13.42% 1-week price total return and a -18.7% 1-month price total return, confirming the recent downward trend in the company's stock performance.
Despite the recent turbulence, Spak remains optimistic about Rivian's future. He anticipates that the market will refocus on the company's improving fundamentals, which he believes are strong enough to weather the current challenges. This perspective aligns with a couple of InvestingPro Tips, which highlight that Rivian holds more cash than debt on its balance sheet and has been consistently increasing its earnings per share.
Spak also adjusted his price target for Rivian, lowering it from $26 to $24. This decision reflects potential production and delivery hurdles anticipated for 2024. Despite these potential obstacles, the UBS analyst's overall outlook for Rivian remains positive, as reflected in his rating upgrade.
InvestingPro data indicates Rivian's market cap stands at $17.81B, with a negative P/E ratio of -3.61, reflecting the company's current unprofitability. This is confirmed by another InvestingPro Tip that analysts do not anticipate the company will be profitable this year.
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