Rivian Stock Price Target Lowered (RIVN), Potential Upside Remains

Rivian's stock (NASDAQ: RIVN) has given holders little to cheer through 2024, with a decline in price of 51.47% YTD keeping the stock toward lows.

After what appeared to be somewhat of a breakout, with RIVN rising by 75% from the 22nd June low of $10.32 through to 12th July where prices breached $18, the stock has again found itself giving up all these gains with the most recent close of $10.24.

Downward revisions from analysts will not be what bulls were hoping for, but that is what the market gods have for us at this time, with a couple of recent trims in price target. Analysts at Truist Securities recalibrated their outlook on the electric vehicle manufacturer's stock, a day after Barclays have done the same.

Truist has revised its price target for Rivian Automotive's stock to $12, down from the earlier $16, yet it retains a Hold rating on the shares. This decision anticipates the upcoming Q3 results within the Alternative Energy / Mobility sector. The announcement follows Rivian's recent struggle with production issues due to supplier challenges, which contributed to quarterly delivery and production figures missing initial estimates.

With the timeline and resolution of these supply chain disruptions yet to be determined, as well as revised guidance from the company, investors are eagerly waiting to see if Rivian can navigate a path towards the profitable and sustainable production of its electric vehicles.

Barclays' cut their respective price target from the same $16 level to a new mark of $13, whilst maintaining an equal weight rating. The analyst adjustment came as part of their Q3 earnings preview, with commentary around a preference for car makers over suppliers, and hopes of an end to negative revisions on the horizon.

Another cut in recent weeks came from Canaccord, with a trim from the firm from $30 to $28 remaining bullish, with deliveries seen as being on target acting as a good setup for '25.

Based in Irvine, California, Rivian Automotive designs, manufactures, and markets electric vehicles and related services. The company boasts products like the R1T pickup truck and R1S SUV, catering to both the consumer and commercial markets, which includes its collaboration with Amazon.com, Inc. for the delivery of electric vans.

The company bears a market capitalization of approximately $10.32 billion, with share prices fluctuating within a 52-week range of $8.26 to $24.62.

Regarding analyst perspectives, Rivian is seen with a target mean price of $17.16 and carries an average recommendation of ‘buy' across 25 analyst opinions. This outlook stands for a company steeped in insider confidence, with insiders holding roughly 26.94% and institutions holding 49.5%, suggesting strong belief in Rivian's strategic direction and long-term prospects.

The mobility and alternative energy landscape are subject to swift changes and technological advancements. In facing such an environment, Rivian's operational agility and product allure will play essential roles in navigating market variances and fulfilling investor expectations. Despite the present headwinds, Truist's adjusted price target, albeit reduced, remains above the current trading price—signaling a measured optimism in Rivian's ability to align production capabilities with market demands.

The price target adjustment by Truist, and others reflects due caution in the face of challenges but does not negate the confidence in Rivian’s long-term strategy and market potential. Even the lower of the revisions indicates a potential upside of close to 20% from the current price action, with the more bullish target representing more than 2.5x. Signs of a breakout that holds above support could be key, and if the bulls get their turn, previous runs have proved very rapid indeed.