What's Going On With The Stock?

Shares of Rivian Automotive, Inc. (NASDAQ:RIVN) rose in premarket trading on Monday after suffering sharp pullbacks following the electric vehicle startup's quarterly report last week.

The stock lost a whopping 38% in the week ended February 23, closing at a record low after the company reported 2024 delivery guidance that fell well short of the Street's expectations. Following the results, sell-side analysts lowered their forecasts for the company and thus also lowered their price targets for the stock.

The stock also suffered downgrades from JPMorgan, UBS and Truist Securities.

JP Morgan downgraded the stock from Neutral to Underweight and lowered its price target to $11 from $20.
UBS downgraded the stock from “Buy” to “Sell” and lowered its price target from $24 to $28.
Truist lowered the stock's rating from “Buy” to “Hold” and lowered its price target from $26 to $11.

Monday's rebound could be because the sell-off may have been overdone. After last week's dismal stock performance, Tesla investor Gary Black defended the company. He noted that the company will likely become a credible number two to Tesla by 2030.

Black expects Rivian to achieve positive gross margin by the fourth quarter, Black said, adding that the company's cash burn will decline significantly by 2024. He also worried that Rivian customer Amazon might be considering buying its electric delivery truck supplier.

The company has an important near-term catalyst as the Irvine, California-based company prepares to launch its second-generation R2 budget electric vehicle on March 7.

In the event of a reversal, the stock should fill the gap created by the post-quarter earnings decline and overcome key resistance around the $15 level. The stock is currently in oversold territory as measured by its relative strength index.

In premarket trading, Rivian rose 1.09% to $10.18, according to Benzinga Pro.

The story goes on

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