Rivian Automotive (RIVN) stock is sinking in Friday's session after the electric vehicle (EV) maker came up short of delivery expectations for its third quarter and lowered its production outlook for 2024.
RIVN delivered 10,018 vehicles in the third quarter, a decrease of 35.6% from the year-ago period. As a result of supply shortages, the company lowered its full-year production outlook to a range of 47,000 to 49,000 vehicles after previously guiding for 57,000 vehicles.
"Rivian is experiencing a production disruption due to a shortage of a shared component on the R1 and RCV platforms," the company said. "This supply shortage impact began in Q3 of this year, has become more acute in recent weeks and continues."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Despite the production issues, Rivian reaffirmed its annual delivery outlook of 50,500 to 52,000 vehicles, which represents low single-digit growth compared to 2023.
The third-quarter deliveries came in below analysts' expectations. Wall Street was anticipating deliveries of 13,000, according to CNBC.
Is Rivian stock a buy, sell or hold?
It's been a rough stretch for the consumer discretionary stock, which is down more than 53% for the year to date. Still, Wall Street is bullish toward Rivian.
According to S&P Global Market Intelligence, the average analyst target price for RIVN stock is $17.53, representing implied upside of nearly 75% to current levels. Additionally, the consensus recommendation is Buy. However, these ratings and estimates may change following the recent news.
And some on Wall Street have already turned negative on the EV stock. Financial services firm CFRA Research, for instance, reiterated its Sell rating this morning and lowered its price target on Rivian to $5 from $8 following the production cut.
"We have been skeptical of RIVN's ability to achieve its 2024 guidance from the start and think the announcement is likely to raise red flags among investors," says CFRA Research analyst Garrett Nelson. "In our view, the list of concerns related to the RIVN story is lengthy: slowing EV growth, a lack of visibility related to its reservation count, a troublesome cash burn rate, and the high capital expenditures requirements of building a new factory in Georgia."
Related Content
-
What Wall Street Expects from Tesla's Robotaxi EventTesla’s robotaxi event kicks off next week. Here’s what Wall Street expects to see and how analysts feel about the stock heading into the event.
-
Election 2024: Politics and Your PortfolioWho wins the White House matters — but only at the margins when it comes to your investment portfolio.
-
Tesla's Robotaxi Event: What Wall Street Expects
Tesla’s robotaxi event kicks off next week. Here’s what Wall Street expects to see and how analysts feel about the stock heading into the event.
-
Election 2024: Politics and Your Portfolio
Who wins the White House matters — but only at the margins when it comes to your investment portfolio.
-
Four Social Security Myths DebunkedWith so many headlines surrounding Social Security these days, what is fact and what is fiction? For instance, will the program really run out of money?
-
Can You List From Memory Everything That's in Your House?That's what you'd have to do if something happened to destroy it all. It's important to make a record of your belongings so you can be reimbursed by insurance.
-
Stock Market Today: Stocks Drop Ahead of September Jobs ReportStocks were choppy Thursday as investors took in a higher-than-expected rise in jobless claims and strong growth in the services sector.
-
When Should Retirees Consider a Donor-Advised Fund?Charitable giving in retirement isn't right for everybody. But in certain situations, a tax-efficient donor-advised fund (DAF) may be well worth considering.
-
Four Things to Know About Your Collectibles and Homeowners InsuranceIf you're crazy about collectibles, and your hoard is growing in value, you may need to consider specialized insurance to protect your investment.
-
Stock Market Today: Stocks Waver on Resilient Employment DataA private reading on payrolls had markets rethinking rate-cut bets just days ahead of the monthly jobs report.
