Rivian Automotive, Inc. shares experienced a decline of 1.6% on Tuesday, following a downgrade from Wolfe Research. The firm adjusted its rating from “peer perform” to “underperform,” causing the stock to reach a low of $18.65 before closing at $18.85. The trading session saw approximately 24.6 million shares exchanged, a notable drop of 28% from the average volume of 34 million shares.
The stock’s previous close was $19.15, reflecting a growing concern among analysts regarding Rivian’s performance. Other investment firms have also weighed in on the company, with Mizuho maintaining an “underperform” rating and decreasing its target price from $14.00 to $10.00 in a report dated October 20, 2023. Conversely, Wedbush raised its price target from $16.00 to $25.00, issuing an “outperform” rating.
Analysts’ sentiments vary widely; while some see potential in Rivian, others express caution. Zacks Research upgraded its rating from “strong sell” to “hold” on November 10, 2023, while Cfra Research changed its stance to a “moderate sell” rating on October 2, 2023. Needham & Company LLC further increased its target price from $14.00 to $23.00 and assigned a “buy” rating on December 12, 2023. Overall, Rivian currently holds a consensus rating of “hold” with an average price target of $15.95, according to MarketBeat.com.
In a related development, Rivian’s CEO, Robert J. Scaringe, sold 17,450 shares on January 6, 2024, at an average price of $19.55, totaling approximately $341,147.50. After this transaction, Scaringe retained ownership of 1,132,659 shares, valued at around $22.1 million. Similarly, Director Peter Krawiec sold 3,655 shares on December 15, 2023, for a total of approximately $71,089.75. Insiders have sold a cumulative 155,054 shares over the last three months, amounting to $2.7 million, with insiders currently holding 2.16% of the company’s stock.
The recent week has brought mixed news for Rivian. On a positive note, the company appointed Greg Revelle as its Chief Customer Officer, a move aimed at enhancing customer operations. Additionally, Scaringe is set to be a keynote speaker at the ACT Expo 2026, an event that could bolster Rivian’s visibility among fleet and commercial buyers.
Nevertheless, challenges loom. Rivian announced a recall of nearly 20,000 R1 vehicles due to a potentially outdated service procedure causing rear toe-link issues. This recall raises concerns about warranty costs and could impact the company’s reputation. Analysts have urged caution, with commentary suggesting that the recall may provide “20,000 reasons to consider selling Rivian stock.”
Hedge funds have been active in the market, with several institutions adjusting their stakes in Rivian. Brighton Jones LLC increased its position by 28% in the fourth quarter, while AQR Capital Management LLC boosted its stake by 1.5% during the first quarter. Overall, institutional investors now own 66.25% of Rivian’s stock.
As Rivian navigates these developments, the company reported a quarterly earnings loss of $0.65 per share, exceeding analysts’ consensus estimates of $0.71 on November 4, 2023. The company generated revenue of $1.56 billion for the quarter, significantly higher than the expected $1.27 billion and reflecting a 78.3% year-over-year increase.
Founded in 2009 by RJ Scaringe, Rivian Automotive is recognized for its all-electric R1 platform, which includes the R1T pickup truck and R1S sport utility vehicle. The company has also secured a contract to produce electric delivery vans for a leading e-commerce provider, showcasing its capabilities in both consumer and commercial markets.
As Rivian continues to adapt to market pressures and operational challenges, investors will be closely monitoring future developments and performance metrics.
