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Rivian Stock Plunges Amidst Strong Quarter, Heightened Wall Street Ambivalence Towards EV Manufacturer

Rivian's stock drops despite better-than-expected quarterly results, analysts cautious about the company's future and stock direction.

Rivian Automotive Inc. received positive feedback for its quarterly results, surpassing expectations. However, this did not translate into a boost in the company's stock value. Analysts maintain a cautious view on the company's direction in the near term.

On Wednesday, Rivian's shares (RIVN, -8.17%) dropped by over 9%, following the company's report of 52,000 vehicles sold, up from 50,000.

The stock is on track to reach its lowest point in just over a month and is poised for its largest one-day decline since March 7, when it fell by more than 14%.

Alex Potter from Piper Sandler expressed mixed sentiments, stating, "We're torn." He acknowledged it was a "good" quarter but highlighted the capital burden that tempers the stock's upside potential. Potter maintained a hold rating on Rivian shares.

While recognizing Rivian's credibility and expressing belief in the product, brand, and strategy, Potter raised the target price to $22 from $14. However, questions still linger, and the overall sentiment remains neutral.

Piper Sandler's price target suggests a potential downside of approximately 3% compared to the current share price.

Truist analyst Jordan Levy commended Rivian's methodical approach to cost reduction, which is yielding positive results. Levy maintained a buy rating on the stock and a price target of $30.

Michael Shlisky from DA Davidson also increased the price target for Rivian shares to $25 from $18. He acknowledged the significance of Rivian's recent acquisition but stopped short of raising the hold rating on the stock.

Shlisky expressed caution, noting the increasing competition in the EV market with new SUVs and pickup trucks entering the market regularly. However, he believes that Rivian is heading in the right direction.

Rivian's stock has experienced significant growth in the past three months, with a gain of over 60%. In comparison, the S&P 500 index has only advanced by approximately 9% during the same period. While Rivian's outperformance is evident year-to-date, it is less pronounced, with a 23% increase compared to the index's 16% gain.

Overall, despite positive quarterly results, analysts remain cautious about Rivian's stock and its future direction. The company's recent acquisition and methodical cost reduction efforts are recognized, but concerns about competition and execution risks persist.

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