According to a recent note from Barclays, Rivian Automotive (RIVN) has been downgraded from Overweight to Equal-Weight. The stock price target was also reduced from $25 to $16 per share. Analysts based their decision on three factors: the company’s great product but insufficient technology to avoid increased signs of demand pressure amid a broader EV slowdown; demand softness implying risk from pricing and slower volume growth; and signs of demand weakness in EDV and R1T emerging last year, with recent data points suggesting that demand is softening.
Barclays believes that the ongoing need for capital raises at Rivian is significant due to weak demand consequences. Not only does it challenge the volume outlook, but it also presents a potential pricing risk, reinforcing the likelihood that RIVN will miss its 2024 target of reaching gross margin profitability. Moreover, with preparation for the high volume R2 in 2026, future pressure is anticipated. In conclusion, analysts see ongoing challenges for Rivian’s growth prospects and profitability.