Rivian stock gets double downgraded after Q4 earnings

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on Feb 23, 2024
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  • UBS analyst double downgraded Rivian Automotive to "sell" today.
  • Joseph Spak now sees downside in $RIVN to $8.0 per share.
  • Rivian stock has been under immense pressure in recent days.

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Rivian Automotive Inc (NASDAQ: RIVN) is down another 10% on Friday after a UBS analyst double downgraded the EV maker to “sell”.

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Rivian stock could tank another 20%

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Joseph Spak trimmed his price objective on the electric vehicles company as well from $24 to $8.0 which suggests another 20% downside from here.

His super bearish call arrives only days after $RIVN came in well short of analysts’ forecast for full-year production.

A rapidly changing EV backdrop causes us to reassess our demand view and makes Rivian’s current strategy quite onerous on the ramp to profitability and cash flow.

The Nasdaq-listed firm has lost nearly 30% over the past three days even though it did beat Street estimates in its recently concluded quarter as Invezz reported here.

Rivian is a cash burning company

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Joseph Spak is concerned that Rivian Automotive Inc may fail to meet its gross profit and EBITDA guidance for 2024.

He expects the Irvine-headquartered firm to now take longer than previously expected to break even on free cash flow and EBITDA. UBS analyst recommends against owning Rivian stock primarily because it’s a “loss making and cash burning company”.

Note that $RIVN did also announce plans of lowering its headcount by some 10% this week.  

Among other investment firms that have recently downgraded Rivian shares is JPMorgan that now rates them at “underweight”. Its $11 price target still suggests an 8.0% upside from here, though.

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