Rivian Automotive Inc. has experienced a remarkable rally, with its shares soaring by 66% in the past month. However, one analyst at Cantor Fitzgerald, Andres Sheppard, has now taken a more cautious stance.
Sheppard downgraded Rivian shares from overweight to neutral on Tuesday, citing concerns about the company’s valuation. Despite raising his price target on Rivian shares to $29 from $27 and revising various estimates, including 2023 revenue projections, Sheppard believes the stock is now appropriately priced.
Rivian is scheduled to release its second-quarter earnings on August 8, and Sheppard will be closely watching for updates on average selling prices, gross margins, cost savings, and the company’s arrangement with Amazon.com Inc.
Although Rivian’s exclusivity with Amazon may be coming to an end, with the e-commerce giant currently holding approximately 17% stake in Rivian, Sheppard notes that the company’s Electric Delivery Vans agreement is expected to contribute around 20% of revenue this year, similar to last year.
Notably, Rivian has already reported second-quarter delivery and production numbers that exceed Sheppard’s initial projections.
