CFRA reiterated a Sell rating on Rivian on Thursday after the company cut its 2025 delivery guidance for a second time in five months, sending shares down nearly 9% in early trading.
The New York-led firm has a $8.00 price target on the EV maker, which implies a downside of 45.2% based on Wednesday’s close at $14.61.
As of press time, Rivian shares are plunging 8.4% to $13.39.
In a new research note — obtained by PriceTarget — analyst Garrett Nelson said that the firm is keeping its bearish target on the stock, considering it “a premium to Rivian‘s tangible book value of $5.00/share.”
According to Nelson, Rivian‘s third quarter deliveries, despite being its best quarterly results year to date, missed CFRA’s estimates of 14,000 vehicles by 800 units.
Production was also “shy of our 10,800 forecast,” the analyst added as Rivian reported 10,720 vehicles manufactured between July and September.
After reaffirming its annual guidance of 40,000 to 46,000 vehicles in mid-September, Rivian has now readjusted it to between 41,500 and 43,500 units — raising demand concerns among investors.
Nelson also noted that “with Q3 marking the second straight quarter in which Rivian‘s deliveries have exceeded production by a wide margin, Rivian now appears to be sitting on much lower inventory levels.”
As EV sales surged ahead of the September 30 deadline for the US federal consumer credit, CFRA now expects “a material drop in EV demand beginning in the current quarter.”
Furthermore, the analyst says Rivian‘s cash burn rates are “highly concerning,” with the construction of a new plant in Georgia acting “as an even greater drag on free cash flow.”
Last month, construction began for Rivian‘s $5 billion plant in Georgia, after several delays.
The company is supported by federal and state incentives; however, investors still see it as a burden in the balance sheet.
“We find RIVN’s cash burn rates highly concerning and the constructionÂ
of a new plant in Georgia should act as an even greater drag on free cash flow, which we expect to escalate balance sheet worries and weigh on equity performance,” Nelson wrote.
In late September, CNBC’s Mad Money host Jim Cramer also criticized the money spent at the upcoming plant, telling investors to avoid buying Rivian stock now.
