Why Rivian Stock Is Crashing Today
Rivian Automotive (NASDAQ: RIVN) stock slumped Tuesday morning and was down by 7.6% as of 11 a.m. ET. Just as the electric vehicle (EV) maker is trying to turn things around and scale up production and sales, leading automakers are warning about a visible slowdown in the global EV market. At least one analyst believes Rivian could have a particularly trying time and may miss a crucial financial goal this year.
analyst Dan Levy slashed his price target on Rivian stock from $25 per share to $16 a share on Monday based on weakening EV demand. Levy believes Rivian will not be able to escape the pressure on the broader EV market, and that could hurt not only its sales volumes, but also its pricing power. In his view, the odds are that Rivian will miss its goal of hitting a positive gross margin by the end of 2024.
Rivian shares slipped on Monday, but extended their losses Tuesday morning as January's inflation figures came in higher than expected at 3.1% year over year and 0.3% month over month. Inflation and higher interest rates are significant headwinds to the automotive industry as cars and loans become costlier, forcing many would-be customers to delay or cancel purchases. And if the Federal Reserve sees the need to keep up its battle against Inflation, it may not cut interest rates as quickly or as far as some had hoped this year.
Source Fool.com
