HomeBusinessRivian Automotive Stock Is Up 26% According To This Wall Street Analyst

Rivian Automotive Stock Is Up 26% According To This Wall Street Analyst

Rivian automotive industry (NASDAQ: RIVN) received several downgrades from analysts in the wake of its fourth-quarter earnings report published on February 21. Sales more than doubled last year, but rising interest rates are starting to take their toll on demand for electric vehicles (EV). Management expects production to remain stable year over year at 57,000 units in 2024.

Morgan Stanley The price target for the stock was lowered from $24 to $14. The new price target is 26% higher than Rivian’s current share price. Despite the negative sentiment surrounding the stock at the moment, Morgan Stanley is still optimistic about Rivian’s future as it maintained an Overweight (Buy) rating on the stock.

Why Wall Street Analysts Remain Optimistic About Rivian’s Long-Term Prospects

The average analyst recommendation still has a buy rating for the stock. Optimism about the company’s future is based on Rivian’s emerging electric vehicle brand and advanced online car purchasing experience. It is also still supported by Amazonwhich owned 158 million shares of Rivian Class A common stock at the end of 2023.

See also  You won't believe my shocking Nvidia stock prediction

Vehicle sales will always fluctuate with the direction of interest rates, but the real reason investors are abandoning Rivian is because the company is losing a lot of money. It needs to scale up its car production to leverage its cost structure and make profits. But Rivian’s adjusted free cash flow was negative $1.4 billion in the fourth quarter, which was larger than the $1.3 billion it generated in revenue.

Wall Street’s short-term focus shouldn’t mean much to long-term investors, but analyst opinions can significantly influence sentiment around the stock price. Rivian’s weak outlook means the stock is unlikely to recover until rates fall or the company shows improvements in cutting costs.

Should You Invest $1,000 in Rivian Automotive Now?

Consider the following before purchasing shares in Rivian Automotive:

The Motley Fool stock advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and Rivian Automotive wasn’t one of them. The ten stocks that survived the cut could deliver monster returns in the coming years.

See also  Stock Market Today: Dow Jones Rises After Surprising Inflation Figures; Nvidia and Tesla extend their losses

Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates, and two new stock picks per month. The Stock Advisor service has more than tripled the return of the S&P 500 since 2002*.

View the 10 stocks

*Stock Advisor returns February 26, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

Rivian Automotive Stock Is Up 26% According To This Wall Street Analyst Originally published by The Motley Fool

- Advertisement -


Please enter your comment!
Please enter your name here

Most Popular

Recent Comments