Analyst: Rivian Automotive Stock Facing "Demand Pressure"

The EV stock sports a considerably year-to-date deficit

Deputy Editor
Feb 12, 2024 at 9:35 AM
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Shares of electric vehicle (EV) giant Rivian Automotive Inc (NASDAQ:RIVN) are off by 4% to trade at $16.20, after a bear note from Barclays. The analyst downgraded RIVN to "equal weight" from "overweight" and cut its price target by $9 to $16, citing demand softness and saying that the company's products and tech, although great, are "not enough to avoid increased signs of demand pressure amid broader EV slowdown." 

RIVN has started the year off with four-straight weekly losses and a 29% year-to-date deficit. It could get worse, considering the majority of analysts are bullish, leaving room for optimism to unwind. At last check, 16 in coverage rate Rivian Automotive stock a "buy" or better, while seven recommend a tepid "hold." What's more, the average 12-month target price of $26.64 is a 53.4% premium to Friday's close, leaving room for even more price-target cuts.

Similarly, options traders are more optimistic than usual, meaning a shift in sentiment is likely overdue. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 4.87 stands higher than 93% of readings from the past year.

Those looking to speculate with options should take advantage now. The stock's Schaeffer's Volatility Scorecard (SVS) of 82 out of 100 indicates that the equity usually outperforms volatility expectations. 

 

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