Rivian Automotive, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Ryan Brinkman from J.P. Morgan reiterated a Sell rating on the stock and has a $9.00 price target.
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Ryan Brinkman has given his Sell rating due to a combination of factors surrounding Rivian Automotive’s financial performance and market conditions. The company reported a larger than anticipated EBITDA loss for the second quarter, and it is expected to incur an even greater loss for the full year. This is primarily due to operational inefficiencies and the earlier than expected reduction of EV subsidies, which have negatively impacted automotive gross margins.
Additionally, Rivian’s revenue from automotive regulatory credits was significantly lower than expected, further exacerbating financial challenges. The company’s core automotive gross margin, a critical performance metric, remains weak, highlighting the difficulties in achieving profitability in the competitive electric vehicle market. Despite potential future growth with the launch of the R2 model, significant execution risks and increasing market competition contribute to the cautious outlook, leading to the reiterated Underweight rating.
Brinkman covers the Consumer Cyclical sector, focusing on stocks such as Tesla, Lear, and BorgWarner. According to TipRanks, Brinkman has an average return of -4.6% and a 48.68% success rate on recommended stocks.
In another report released today, Bernstein also reiterated a Sell rating on the stock with a $7.05 price target.