Jefferies analyst Philippe Houchois downgraded on Wednesday Rivian‘s stock rating from Buy to Hold.
“We like Rivian‘s brand equity story and software achievements,” the analyst said, maintaining a price target of $16.00 — implying an upside potential of about 8%.
Last week, the company reported a record gross profit of $206 million for the quarter, marking its second straight quarter of positive profit, a result that was mainly due to $157 million in revenue from automotive regulatory credit sales.
In a new research note, Houchois said that the figures “got helped by new accounting of previously received funds” — both the regulatory credits and its joint venture with Volkswagen.
While the EV maker booked most of regulatory credits in the final quarter last year, it reported half of its full-year guidance for 2025 in the first quarter alone.
The figures also include $1 billion from the ‘Rivian and VW Group Technology‘ joint venture.
Volkswagen agreed to invest $5.8 billion in the EV maker as it provides the German automaker with next-generation EV architecture and software, granted that the American brand posts positive profit.
The analyst highlighted that “management also demonstrated further progress in driving down R1 variable unit costs and in managing cash carefully.”
However, “with a downbeat demand outlook this year” caused by potential tariff impact, the firm is “left waiting for updates on R2 progress and hoping for 3rd party opportunities in EE/SDV [Electrical Engineering/Software-Defined Vehicle].”
CEO RJ Scaringe stated on last week’s earnings call that the company’s manufacturing plant will be closing temporarily to integrate key manufacturing processes for the upcoming R2 SUV.
Rivian’s in-house developed autonomy platform was rolled out in March via a software update for second-generation R1T and R1S vehicles. It currently supports hands-free driving on major highways through a feature called Enhanced Highway Assist.
On Wednesday, Scaringe stated that Rivian plans to expand its coverage and to implement an advanced “hands-off, eyes-off” capability, designed for use in controlled conditions.
Earlier this week, several institutions submitted their quarterly filing with the SEC, disclosing Rivian shares held by the end of March.
BlackRock slightly increased its stake by 4.33% to 49,768,655 shares. Its second and third largest institutional shareholders both trimmed their positions by 2—3%: Baillie Gifford held 48,542,887 shares as of March 31, while UBS held 29,152,186.
Over the past twelve months, the stock surged 48%. As of the time of writing, Rivian shares are jumping nearly 5% and trading at $15.60.
