Rivian’s share price has already fallen by a third this year. Deutsche Bank is now quite skeptical about the electric car manufacturer, which is considered one of Tesla’s fiercest competitors in the USA with its range of pickup trucks, SUVs and delivery vans.
• Rivian stock under significant downward pressure
• Analysts downgrade Rivian
• Pessimism about 2024 production and margin
Investors fear that 2024 will be challenging for Rivian and have already sent the electric car manufacturer’s shares down a full 32.91 percent in the short time since the turn of the year (as of January 18, 2024). They are concerned about the ongoing discrepancy between production and delivery volumes: Despite record production, Rivian delivered around 10 percent fewer vehicles in the fourth quarter than in the previous quarter. A similar problem emerged for the year as a whole, because Rivian was able to produce 57,232 electric vehicles in 2023, but only delivered 50,122 of them. Given this, investors are concerned about demand, the company’s ability to fulfill orders and any negative impact on profit margins.
Deutsche Bank analysts give their thumbs down
On Wednesday, January 17, 2024 alone, the stock lost 6.0 percent of its value, which, according to “The Motley Fool”, is due to a previous negative analyst assessment. A team of analysts at Deutsche Bank led by Emmanuel Rosner also considers the prospects for 2024 to be weak and has therefore not only lowered the price target but also the rating for Rivian shares. Accordingly, the price target in the next twelve months is only seen at $19, instead of the previous $29. In addition, the recommendation was reduced from the original “Buy” to just “Hold”.
Analysts predict Rivian will only produce about 65,000 vehicles this year, up just 13.6 percent from the roughly 57,000 vehicles produced in 2023. Emmanuel Rosner sees risks to Rivian’s volumes in 2024 given a slow production ramp-up and prolonged factory closures. In his opinion, this could ultimately put pressure on margins and cause the EV manufacturer significant losses by the third quarter of 2024.
Improvement in sight
At least Rosner gave investors a bit of hope. He believes it is possible that Rivian could achieve a positive gross margin in the final quarter of 2024 as planned – but only on the condition that there are no difficulties.
Investors are likely to receive more clarity on February 21, when the electric car manufacturer will present its figures for the fourth quarter and full year 2023 and may also publish its own estimates for 2024.
Editorial team finanzen.net
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