Irvine, California – Rivian Automotive, Inc. experienced a significant rise in their stock prices in premarket trading on Monday following a steep decline the previous week. The drop came after the electric vehicle startup reported 2024 deliveries guidance that fell short of market expectations, resulting in a 38% loss in stock value and record-low closure. Sell-side analysts responded by lowering their estimates and price targets for the company, with major downgrades from JPMorgan, UBS, and Truist Securities.
JPMorgan downgraded Rivian from Neutral to Underweight and slashed its price target from $20 to $11, while UBS downgraded the stock from Buy to Sell, reducing the price target from $24 to $28. Truist also downgraded its rating from Buy to Hold, dropping the price target from $26 to $11. However, the stock saw a rebound on Monday, possibly indicating that the sell-off had been excessive. Tesla investor Gary Black defended Rivian, expressing optimism about the company becoming a strong competitor to Tesla by 2030.
Black believes that Rivian will achieve positive gross margins by the fourth quarter and expects a significant reduction in cash bleed by the end of 2024. He even suggested the possibility of Amazon, a key Rivian customer, considering acquiring the electric delivery van supplier. The company’s upcoming launch of its second-gen R2 low-priced EV on March 7 provides a key catalyst for its future performance.
For a reversal in stock performance, Rivian needs to fill the gap created after the quarterly results and surpass a critical resistance level around $15. Currently in oversold territory according to its relative strength index, the stock rose by 1.09% to $10.18 in premarket trading. These developments come ahead of the company’s strategic moves as it navigates through the volatile electric vehicle market, setting the stage for potential growth and recovery.