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Investing.com — Baird cut its stock Rivian Cars Inc (NASDAQ: ) to $16 from $18 given lower production in 2025 and a smaller-than-expected position in electric vehicles.
Borrowings remain positive on Rivian’s brand and long-term prospects but expressed skepticism about long-term growth. Rivian’s Q3 results missed expectations, and its low performance has made it difficult to deal with fixed costs, Baird said.
“With Volkswagen (ETR:) JV closed recently and the DOE’s financial announcement, which was a surprise, in the past, we see little incentive in 2025 and we expect that the shares will be damaged by EV sales, which may be slower compared to expectations,” said the analyst.
The Volkswagen JV, which is expected to close before the end of the year, may provide a better explanation for the partnership, but the main sales of EVs are likely to be sluggish, the company added.
Baird’s revised valuation was based on an 11x multiple of its 2028 EBITDA estimate, discounted to 2025, reflecting the value of EVs and automakers due to Rivian’s growth.
While Rivian’s R2 platform and long-term goals remain encouraging, the company’s path to higher profitability by the end of 2024 will remain a key focus for investors, the note said.
On the other hand, Baird increased his price on Tesla (NASDAQ:) by $200, on the support of the growth of 2025.
