Rivian Automotive’s Underperformance: Challenges in Financials and Future Outlook

Bank of America Securities analyst Federico Merendi has reiterated their bearish stance on RIVN stock, giving a Sell rating today.

Federico Merendi’s rating is based on Rivian Automotive’s recent financial performance and future outlook. The company reported second-quarter results for 2025 that fell short of expectations, with adjusted EBITDA significantly below both Bank of America and consensus estimates. Additionally, Rivian’s gross profit turned negative, and its gross margin missed projections, partly due to lower production impacting fixed cost absorption.
Further challenges include the unchanged delivery guidance amidst the phasing out of IRA credits, which could hinder future vehicle volumes, particularly for the upcoming R2 model. The company’s revised EBITDA guidance reflects lower regulatory credits, and there are concerns about increased operational expenses and vehicle costs. These factors, combined with potential production issues and regulatory challenges, contribute to the reiterated Underperform rating with a price objective of $10.

In another report released today, Bernstein also reiterated a Sell rating on the stock with a $7.05 price target.