Shares of electric vehicle (EV) maker Rivian Automotive (NASDAQ: RIVN) have trended higher since the company announced upbeat production numbers earlier this month. That said, shares are still down 69% year-to-date, due to supply chain woes and other macro challenges. As per a recent Bloomberg report, Rivian could lay off up to 5% of its workforce amid rising concerns of an economic downturn.
While Wall Street analysts remain cautious, Rivian’s second-quarter earnings, which are scheduled on August 11, along with management commentary on the company’s outlook, might influence the stock’s movement over the near-term.
Rivian’s Production Update Fueled Optimism
Rivian produced 4,401 vehicles at its manufacturing facility in Normal, Illinois in the second quarter, reflecting a sharp rise from the 2,553 vehicles manufactured in the first quarter. The company’s second-quarter deliveries came in at 4,467 vehicles.
Furthermore, Rivian reiterated its full-year production target of 25,000 vehicles. This came as a big relief to investors, as Rivian and several other EV makers have been under pressure due to component shortages and production woes.
Rivian currently manufactures R1T pickup trucks, R1S SUVs (sport utility vehicles), and EDVs (electric delivery vans) at its Illinois facility. The company is working on an initial order (placed in 2019) of 100,000 EDVs from its major shareholder, Amazon (AMZN). Rivian aims to boost production at its existing plant and also plans to open a second manufacturing facility near Atlanta, Georgia.
Wall Street is Treading Carefully
Recently, Canaccord Genuity analyst George Gianarikas initiated coverage on Rivian stock with a Buy rating and a price target of $61.
Gianarikas believes that Rivian has the ability to emerge as a leader in the EV market. The analyst added, “The company has amassed strong talent, a robust balance sheet, a durable Amazon partnership, and the proper vertically integrated strategy.”
Furthermore, Gianarikas is confident that management is in a position to execute, following several concerns since the company’s initial public offering in late 2021.
Meanwhile, yesterday, Deutsche Bank analyst Emmanuel Rosner lowered his price target for Rivian stock to $46 from $69, but maintained a Buy rating. Rosner anticipates U.S. auto suppliers to post “soft” second-quarter results. However, he expects U.S. auto suppliers to generally maintain their guidance to reflect strong improvement in the second half of the year.
Overall, the Street is cautiously optimistic on Rivian stock, with a Moderate Buy consensus rating based on nine Buys, five Holds, and one Sell. The average Rivian price target of $49.33 implies 55.13% upside potential from current levels.
Conclusion
Sentiment on Rivian stock has improved since the company announced its second-quarter production numbers. While the stock continues to be in the red year-to-date due to concerns over a potential recession, a strong second-quarter earnings report and improved outlook for the quarters ahead could impact the stock positively.
