What Happened?
Shares of electric vehicle manufacturer Rivian (NASDAQ:RIVN) fell 9.4% in the morning session after the company cut its annual (2024) production estimate to between 47,000 and 49,000 vehicles (versus its prior guidance of 57,000 vehicles). Rivian cited supply chain issues partly caused by a shortage of components used to make some of its vehicles. The company also reported third-quarter production and delivery numbers, which fell short of consensus estimates. Overall, the updates suggest the Rivian might struggle to hit its sales targets heading into the last quarter of the year.
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What The Market Is Telling Us
Rivian’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock dropped 6.4% on the news that Morgan Stanley analyst Adam Jonas updated his rating on the stock of some of the auto manufacturers. Jonas downgraded Rivian from Overweight (Buy) to Equal-Weight (Hold) and lowered the price target from $16 to $13. The analyst expressed reservations regarding Rivian's ability to competitively improve its computing capabilities without putting too much pressure on its finances.
Rivian is down 51.2% since the beginning of the year, and at $10.29 per share, it is trading 57.8% below its 52-week high of $24.35 from December 2023. Investors who bought $1,000 worth of Rivian’s shares at the IPO in November 2021 would now be looking at an investment worth $102.14.
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