Understanding Rivian's Stock Struggles: A Deep Dive into RIVN's Challenges
Why Rivian's Stock is Crashing
The share price of electric vehicle manufacturer Rivian (NASDAQ: RIVN) continues to struggle due to bleak projections for the company's revenue and production estimates.
Notably, the stock has struggled throughout 2024 as the company has been weighed down by slowed demand in the EV market. As a result, RIVN is down over 50% year-to-date.
By press time, the stock had extended losses, trading at $10.37, down 4.5% from the close of the last trading session.
Why RIVN Stock is Down
The significant correction can be attributed to DA Davidson's October 29 investor note, which stated that Rivian presents ‘many uncertainties’ to investors.
Analyst Michael Shilsky maintained a conservative stance on the company, citing near-term production issues and supply chain dynamics.
Shilsky stated that the stock will likely be affected in the fourth quarter due to potential ongoing supply chain challenges. According to the expert, Rivian's projected production shortfall in the third quarter will likely weigh down on the equity.
To this end, DA Davidson maintained a ‘neutral’ rating for Rivian stock while forecasting a price target of $13. This outlook comes ahead of the EV maker's third earnings report scheduled for November 7, 2024.
Rivian’s Production Troubles
Rivian has witnessed a lackluster performance in recent weeks after revising its annual production guidance to be between 47,000 and 49,000 vehicles, down from 57,000, citing a “production disruption.” This disruption is expected to be felt in the third quarter.
These adjustments have led several analysts to lower price targets for RIVN, with Truist lowering its projected valuation from $16 to $12 with a “Hold” rating. Likewise, Barclays cut its price target from $16 to $13, citing uncertainty about when the company’s supply chain issues will be resolved.
Therefore, the upcoming Q3 earnings results remain crucial for the company, as a positive update on the supply chain issues will likely sway investor confidence.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.