Piper Sandler analyst Alexander Potter downgraded Rivian Automotive (RIVN) to Neutral from Overweight with a price target of $15, down from $63. The analyst still likes Rivian’s strategy, but says the problem is, the strategy is costly. In order for Rivian to justify its cost structure, the company must spread its investment over millions of units like Tesla (TSLA) does, and in order to finance such aggressive expansion, the company will need capital, the analyst tells investors in a research note. Specifically, the firm thinks $4B-plus will be needed to fund the company’s growth beyond 2025. Rivian shouldn’t abandon its strategy, but until funding is addressed, the stock will stay trading at book value, contends Piper. The firm believes "considerable intrinsic value probably cannot be unlocked within the next 12 months."
Published first on TheFly
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