Rivian Stock Sinks as Analysts Question Growth Prospects and Costly Strategy
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UBS analysts cut their rating on Rivian's stock to sell from buy and slashed their price target to $8, among the lowest on Wall Street.
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Rivian spooked investors by guiding for flat production in 2023 amid weaker demand for EVs and a strategy that impacts profits and cash flow.
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Rivian trucks and SUVs are high priced at $70,000+ limiting demand, and growth relies on launching its cheaper electric SUV R2 in late 2026.
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Rivian's vertically integrated strategy is costly and clashes with slower near-term EV demand and a difficult market environment for funding.
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UBS notes potential upside if EV demand proves stronger than expected or if Rivian cuts costs more than anticipated or pivots strategy.