JP Morgan maintained its Underweight rating on Rivian this Wednesday, after the company reported higher-than-expected costs for the fourth-quarter and projected continued elevated expenses in its 2026 outlook.
The update comes a day after the company’s Chief Financial Officer Claire McDonough participated in a JP Morgan Conference in Miami, in which she addressed cost reductions, production scaling of the R2 vehicle and the progress of the EV maker’s joint venture with VW Group, among other topics.
The New York-based investment firm lowered Rivian‘s price target by a dollar to $9.00, implying a 40.4% downside to the stock, based on Tuesday’s close at $15.10.
The EV maker’s stock reached a 2025 high of $22.45 on December 22, after previously falling to as low as $12.50 in April amid tariff-related announcements.
In January, the shares dropped sharply, losing nearly $10 as of February 5.
They rebounded a week later, climbing to around $17 after the company reported fourth-quarter results that beat Wall Street expectations and early media reviews of its upcoming R2 model were published.
However, the rally proved short-lived, as the stock gave back most of those gains and has traded at around $15 in the past week.
As of press time, the company was trading nearly 1% lower at $15.00 on Wednesday’s market session.
JP Morgan’s Take
JP Morgan held a record 22 million shares on Rivian by the end of 2025, ranking as its sixth largest institutional shareholder.
In a new research note, obtained by PriceTarget on Wednesday, analyst Alan Brinkman said the EV maker’s guidance pointing to wider losses in 2026 prompted the firm to revise its estimates.
Rivian posted “a smaller than expected EBITDA [earnings before interest, taxes, depreciation and amortization] loss and free cash outflow in 4Q25,” the analyst wrote.
However, he noted that the company guided to a “larger than expected” $2 billion EBITDA loss and implied free cash outflow for full-year 2026, “as it became clearer that 2026 is likely to represent more of a ‘transition year’ for the automaker.”
According to the analyst, these estimates show that the “potential financial benefit from the critical midyear 2026 launch of its first widely affordable vehicle” is now “seen beginning only in 2027.”
Management also echoed this idea throughout the latest earnings call in February.
“Launching R2 will extend our brand to the mass market, and we expect R2 will drive meaningful automotive segment growth and profitability over time,” the CFO stated.
When questioned by Wolfe Research analyst Emmanuel Rosner about the company’s earlier comment that it was aiming for “some level of profitability” on the R2 by the fourth quarter of this year, the executive reiterated that Rivian expects 2026 to be a “transformational year” for its automotive gross profit.
Updated Forecast
Up until the end of 2025, Rivian had an industry record cash burn rate of over $24 billion, which founder and CEO RJ Scaringe addressed late last month, calling it the costs of building “a very large company.”
JP Morgan expects the EV maker to burn $3.5 billion in free cash in 2026, $1.2 billion more than its previous estimate.
The analyst said the revision was driven by “guidance for higher than expected capital expenditures, and the push-out into 2027 of working capital benefits associated with a material rise in R2 production we previously anticipated in 2H26.”
In its Shareholder Letter, Rivian said it expects EBITDA losses of $1.80 billion to $2.10 billion, along with capital expenditures of $1.95 billion to $2.05 billion.
A “lower outlook for 2026 deliveries” than previously expected also prompted JPMorgan to raise its forecast for the company’s EBITDA loss to $1.9 billion, up from an earlier estimate of $1.6 billion.
Rivian guided vehicle deliveries between 62,000 and 67,000 vehicles this year, with McDonough stating at the earnings call that the company sees the R1 and commercial van being “roughly in line with our 2025 total volumes.”
The clarification implies that Rivian is expecting R2 to account for nearly 20,000 to 25,000 vehicle deliveries in 2026, after production and deliveries begin in the second quarter.
The company is scheduled to “share full details” about the upcoming model on March 12, including specs, pricing and trims available at launch.
