Is Rivian stock a buy after today’s big drop?
rivian cars (RIVN -7.18%) Stock prices plummeted at the start of the new year. The stock fell nearly 30% in the first two weeks of 2024. Some analysts believe this is because this will be a difficult year for electric vehicle (EV) startups.
The stock price continued to fall following the analyst team’s announcement today. Deutsche Bank It downgraded Rivian stock and significantly lowered its price target for the company. Long-term investors may be wondering whether the recent decline presents a good opportunity to buy Rivian stock. As of 11:20 a.m. ET today, the stock was down 5.4%.
Trading volume and margin concerns in 2024
Analysts expect Rivian to produce only about 65,000 vehicles this year. This represents only a 13.6% increase compared to 2023 production of approximately 57,000 units. Rivian will not provide estimates to investors until it reports its fourth quarter and full-year 2023 results on February 21.
If the company’s 2024 guidance is in line with Deutsche analysts’ forecasts, investors won’t be happy. This explains why Deutsche downgraded its rating on Rivian from Buy to Hold and lowered its stock price target from $29 per share to $19.
R2 platform and positive margins
The good news for long-term investors is that Rivian is expected to report positive gross margins through the fourth quarter of this year. Additionally, more investors may become interested in Rivian stock when the company unveils its next-generation R2 EV platform this year.
The company said the platform will be used to deliver affordable vehicles at its new Georgia manufacturing facility currently under construction. But many risks remain. Rivian has struggled to increase production over the past two years. For this reason, investing in stocks should still be considered speculative. However, Rivian attempted to differentiate itself among electric vehicle companies by introducing pickup trucks, SUVs, and delivery vans. This makes it an EV company that investors can consider speculating on.
Howard Smith works at Rivian Automotive. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
