Rivian Automotive Inc Price Target Cut by Baird

Investing.com — Baird has reduced its price target for Rivian Automotive Inc (NASDAQ: RIVN) from $18 to $16 due to a weak demand environment for electric vehicles (EVs) and limited catalysts for 2025.

The brokerage remains optimistic about Rivian’s brand and its long-term prospects. However, it has expressed doubts about the company’s near-term growth. Rivian’s Q3 results did not meet expectations, and the lowered production outlook makes it harder to offset fixed costs.

Baird noted, "With the Volkswagen (ETR: VOWG_p) joint venture having recently closed and the Department of Energy (DOE) funding announcement behind us, we see few catalysts in 2025 and expect shares to languish with sluggish EV sales."

The Volkswagen joint venture, expected to finalize before the end of the year, may clarify partnership terms, but overall EV sales are anticipated to remain low, according to the firm.

The revised price target is based on an 11x multiple of the EBITDA estimate for 2028, adjusted back to 2025, which provides a premium over EV and legacy automakers given Rivian’s growth potential.

While Rivian’s R2 platform and long-term margin objectives are viewed positively, achieving gross margin profitability by late 2024 will be a critical point for investors.

In contrast, Baird has increased its price target for competitor Tesla (NASDAQ: TSLA) by $200, citing growth catalysts for 2025.