Now Isn't the Time to Buy Rivian Stock, Says Analyst -- Barrons.com

Al Root

Rivian Automotive stock dropped as a Wall Street analyst downgraded the shares, saying the electric-vehicle company has too many short-term challenges, and that the payoff won't come until later.

Piper Sandler analyst Alexander Potter cut his rating to Hold from Buy and took his price target to $13 from $19. The stock was down 4% at $10.91 in early trading, while the S&P 500 and Dow Jones Industrial Average futures were down 0.4% and 0.5%, respectively.

Potter says Rivian has too much "heavy lifting" to do in 2025, with the benefits coming later. Rivian is working on reducing costs and developing a next-generation, lower-cost vehicle platform that could send sales higher in 2026 and beyond.

Rivian's next models, which will start with the R2, are due out in the first half of 2026. Rivian sells its R1T pickup truck and R1S SUV today. It also sells its delivery van to Amazon.com and other businesses.

In 2025, the company expects to deliver 46,000 to 51,000 vehicles. Rivian delivered almost 52,000 cars in 2024, so it expects a decline.

That lack of growth could weigh on investor sentiment for a while.

Potter likes Rivian's balance sheet strength, though. The company ended 2024 with about $7.7 billion in cash and $9.1 billion in total liquidity. That is enough cash to operate for about three years, according to Wall Street estimates.

Mass-market car companies typically don't generate positive free cash flow until they are selling closer to 400,000 vehicles a year. Wall Street projects Rivian will achieve positive free cash flow in 2029, according to FactSet, when analysts predict sales of 401,000 cars.

With the downgrade, 31% of analysts covering the stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Rivian shares is about $14.70.

Coming into Thursday trading, Rivian stock was down about 15% year to date. Slowing sales growth and looming tariffs that would raise the cost of car parts have weighed on the entire auto sector.

Write to Al Root at allen.root@dowjones.com

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March 20, 2025 10:17 ET (14:17 GMT)

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