Rivian Guidance Is Applauded by Wall Street. Analysts Say Production Is ‘Key.’

Analysts cheered guidance from Rivian.


Courtesy Rivian

Wall Street was upbeat about



Rivian Automotive

in the wake of the company’s mixed second-quarter results. Analysts were cheering the company’s guidance.

The maker of electric trucks posted revenue of $364 million in the quarter, beating expectations for $336 million. The company’s adjusted per-share loss was $1.62 vs. projections for a loss of $1.61. Perhaps most importantly for investors, Rivian (ticker:



RIVN

) maintained its delivery guidance, saying it plans to deliver about 25,000 vehicles for the full year.

“Production is on course and reservations gained further steam, which was the key for the Street despite a widening loss on the bottom-line,” wrote Wedbush analyst Daniel Ives. He reiterated an Outperform rating on the stock, and raised his price target to $45 from $40, adding that he believes the company’s investment in a Georgia production facility will be a long-term positive for keeping up production.

Mizuho Securities analyst Vijay Rakesh agreed, writing that ramping production and deliveries was “key” for the company’s performance.

“Near-term, we continue to watch their roadmap execution and production ramp,” he added. He maintained a Buy rating, but lowered his price target to $65 from $70 to adjust for broader concerns about consumer demand in a slowing macroeconomic environment.

RBC Capital Markets also lowered its price target. Analyst Joseph Spak trimmed his target to $75 from $77 after the company lowered guidance for third-quarter Ebitda, or earnings before interest, taxes, depreciation, and amortization. Rivian is now expecting an annual Ebitda loss of $5.45 billion, reflecting the impacts of inflation, supply-chain challenges, and costs tied to scaling up. Previously, Rivian was forecasting an Ebitda loss of $4.75 billion.

Even so, Spak maintained an Outperform rating, writing that the second-quarter report contained “a number of encouraging data points” about the company’s long-term performance, including margin improvement and a positive update about the company’s electric delivery van partnership with



Amazon

(



AMZN

).

Rivian shares were down 0.1% to $38.93 on Friday. The stock gained 4.1% on Thursday, but has fallen 62% this year.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

Leave a Reply

Your email address will not be published. Required fields are marked *