Baird downgrades Rivian on lack of near-term catalysts By Investing.com

Investing.com – Baird lowered its price target Rivian Automotive: Inc (NASDAQ: ) $16 to $18 in 2025 on limited catalysts and a weaker-than-expected demand environment for electric vehicles.

The brokerage remains bullish on Rivian’s brand and long-term prospects, but expressed skepticism about near-term growth. Rivian’s third-quarter results missed expectations and its reduced production outlook reduced its ability to recover fixed costs, Baird said.

With the recent closing of the Volkswagen ( ETR: ) JV and the DOE funding announcement a positive surprise, we see few catalysts in 2025 and expect the stock to decline with EV sales, which could slow be compared to expectations,” the analyst said.

The Volkswagen JV, which is expected to close by the end of the year, could provide clarity on the terms of the partnership, but broader EV sales are likely to be slow, the company added.

Baird’s revised price target is based on an 11x multiple to 2028 EBITDA estimates, discounted to 2025, reflecting a premium to EV and legacy automakers due to Rivian’s growth potential.

While Rivian’s R2 platform and long-term margin targets remain constructive, the company’s path to gross margin profitability through the end of 2024 will remain a key focus for investors, the note said.

Baird, on the other hand, raised its price target on rival Tesla (NASDAQ: ) by $200, with a catalyst for growth in 2025.