Stifel analyst Stephen Gengaro reiterated on Wednesday the firm’s Buy rating and $16 price target for Rivian shares, following the company’s first-quarter earnings results shared on Tuesday.
In a new research note, Gengaro described the EV maker’s first quarter results and outlook as “a mixed bag” while defending that “the underlying story is intact.”
The analyst highlighted “another quarter of substantial reduction in COGS (costs per good sold) per unit year over year”, a second straight quarter of better-than-expected gross profit and reaffirmed profit expectations for the year.
Based on Tuesday’s closing price of $13.50, the firm’s price target on Rivian implies an upside potential of 18.5%.
Rivian reported a gross profit of $206 million, beating Wall Street expectations and marking its second consecutive quarterly profit — the highest in the company’s history. The result was driven largely by a surge in sales of automotive regulatory credits, which totaled $157 million.
Gengaro also noted that the EV maker reiterated its “adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] outlook against a difficult backdrop,” maintaining its EBITDA loss guidance of -$1.7 billion to -$1.9 billion for the full year.
However, the analyst flagged concerns over the company’s “capital expenditures forecast,” which “increased 12% at the midpoint, driven by the expected impact from tariffs.”
Factory Shutdown
The analyst stated that the EV maker “reiterated expectations to deliver a modest gross profit positive for full-year 2025, despite line shutdowns prepping for R2.”
Rivian is temporarily closing its factory “in the second half of 2025,” as reaffirmed by CEO RJ Scaringe on Tuesday’s earnings call.
The Irvine-based company is “on track with the expected shutdown to both our consumer manufacturing lines in our Normal plant for approximately one month,” according to the chief executive.
In January, Scaringe had already mentioned that the brand would be “building inventory to help mitigate the impacts of our planned shutdown in the second half of the year.”
“So, that one month roughly shutdown has been reflected in our numbers in the guidance that we’re providing,” as the automaker did before “with the Gen 2 launch” in 2024.
Rivian slashed its deliveries guidance for 2025 to between 40,000 and 46,000 vehicles, down from its earlier forecast of 46,000 to 51,000 — something seen by the analyst as negative.
Wall Street Reaction
Gengaro said that the firm sees a neutral outlook “for the shares near-term” and remains “supportive” of a “positive longer-term view” for the company.
As of Wednesday morning, several Wall Street analysts reacted to the earnings results. Out of the seven adjusted price targets, two of them increased, three reaffirmed and two lowered.
Bank of America (BofA) maintained the $10 target on the EV stock, with analyst John Murphy noting that, despite total revenue and gross profit being above the bank’s expectations, it remains bearish on the stock.
Cantor Fitzgerald analyst Andres Sheppard also reiterated the firm’s Neutral rating on Rivian, with a $15.00 price target on the shares.
Needham lowered the price target on the company to $16 (from $17), while Wedbush cut it to $18 (from $20). Mizuho raised the target to $11 (from $10) and UBS to $13 (from $12).
As of the time of writing, Rivian is trading 1.6% lower at $13.29. The stock surged 29% year to date.
