Mizuho analyst Vijay Rakesh lowered Rivian’s price target on Monday to $11 from $13, maintaining a Neutral rating over concerns that lower consumer sentiment “could weigh on deliveries.”
The investment bank reduced the price target by 15% as it views the EV maker’s portfolio as “strong” but sees “limited near-term catalysts for the company.” The revised target is just 2% above Rivian’s latest closing price of $10.75,
“Reiterate RIVN at Neutral and lower PT to $11 with general EV sentiment weighing on the sector, as the rollback of tax subsidies in the US and lower consumer sentiment could weigh in deliveries,” Rakesh wrote.
Rivian sold 4,100 electric vehicles in the U.S. last month, according to estimates from Motor Intelligence. While that marked a 34% increase from January, it was 21% lower than a year ago.
In an effort to bolster first-quarter deliveries, Rivian recently launched a limited-time lease incentive, offering up to $13,500 in savings for customers taking delivery before the end of March.
The downgrade follows a warning from Bernstein analyst Daniel Roeska last week that demand headwinds have returned after Rivian’s retail sales fell 9% year-over-year in February.
“Rivian’s demand headwinds back in focus,” he wrote. “Rivian extends retail sales losses coming in -9% yoy in February. Despite management pointing to LA fires as source of demand weakness, the elevated incentive spend points to weak momentum.”
The company expects to deliver between 46,000 and 51,000 vehicles in 2024, a forecast that falls short of most Wall Street estimates.
As of the time of writing, Rivian shares are trading 1% higer at $10.86.
