Rivian's profit target may reset after production update

Rivian Automotive (RIVN) dropped about four% on Friday after the corporate trimmed its full-year production guidance.

The electric pickup maker is now taking a look at for its annual production guidance to be between forty seven,000 and forty nine,000 vehicles, down from Fifty seven,000 units, which it reaffirmed in August.

Related: Analyst updates Tesla stock forecast before October's key event

This is on account of a component shortage affecting the R1 and RCV platforms. The company said the lack began in the 1/3 quarter and has became more acute recently.

Rivian maintains its annual delivery target, taking a look at for a modest growth of low single digits in comparison with 2023. It projects turning in between 50,Five hundred and fifty two,000 vehicles for the year.

In the 1/3 quarter, Rivian produced 13,157 vehicles and delivered 10,018. So far, in 2024, it has produced 36,749 units and delivered 37,396 units.

Meanwhile, Tesla continues to dominate the market. In the 1/3 quarter, Tesla delivered 462,890 vehicles, reflecting a 6% year-over-year enlarge for the corporate.

What to anticipate for Rivian’s Q3 earnings

Rivian is preparing to liberate its 1/3-quarter financial results on November 7, 2024. In Q2, the corporate exceeded Wall Boulevard’s expectations, reporting a smaller-than-expected lack of $1.13 per share and automotive revenue of $1.Sixteen billion.

Rivian forecast in August an absence of $2.7 billion in adjusted EBITDA and $1.2 billion in capital expenditures. It also said it became to achieve positive gross margins in due course of the fourth quarter of 2024.

The company has been cutting costs. In June, CEO RJ Scaringe said in due course of an investor day event that the corporate became to chop subject matter cost by 20% in its current vehicles, followed by Forty 5% reductions in its upcoming “R2” vehicles, CNBC reported.

“We’re very, very fast driving towards the improvements essential to get to positive free cash drift and, before that, positive margins this year,” Scaringe said.

Related: Tesla analysts update views after Q3 deliveries

Analyst maintains Rivian stock price target

Truist on Oct. four reaffirmed its hold rating and $Sixteen price target for Rivian after the production cut, thefly.com reported.

The analyst notes that Rivian’s Q3 production and delivery numbers fell 10% and 15% lower than consensus estimates, respectively, and questions Rivian’s goal of accomplishing positive gross margins.

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"The company made no mention of the target for positive gross margins by year-end, but it could be now seen as not going, assuming the lack doesn't improve in the very near term,” the analyst said in a research note.

Rivian stock, trading at around $10.forty four on Oct. four, is down more than 50% year-to-date.

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