Rivian Automotive (RIVN 6.10%) stock has been plunging to start the new year. Shares are down nearly 30% just in the first two weeks of 2024. Some analysts think it's because the year will be a challenging one for the electric vehicle (EV) start-up.
Shares continued to slide today after a team of analysts at Deutsche Bank downgraded Rivian shares and significantly lowered the firm's price target. Longer-term investors may be wondering whether the recent decline offers a good opportunity to buy Rivian stock. Shares were down by 5.4% at 11:20 a.m. ET today.
2024 volume and margin concerns
The analysts think Rivian will produce only about 65,000 vehicles this year. That would represent an increase of only 13.6% over 2023's production of about 57,000 units. Rivian won't provide an estimate for investors until it reports its fourth-quarter and full-year 2023 results on Feb. 21.
If the company's 2024 guidance is in line with the Deutsche analyst's prediction, investors won't be happy. That explains why Deutsche lowered its rating on Rivian from buy to hold and dropped the stock price target from $29 to $19 per share.
R2 platform and positive margins ahead
The good news for long-term investors is that the bank does see Rivian reporting a positive gross margin by the fourth quarter of this year. Additionally, more investors could become interested in Rivian stock when the company unveils its next-generation R2 EV platform this year.
The company has said that the platform will be used to offer lower-priced vehicles from its new Georgia manufacturing facility that is currently under construction. But plenty of risks remain. Rivian has had difficulty ramping up production over the last two years. That's why any investment in the stock should still be considered speculative. But Rivian has differentiated itself among EV companies with its slate of pickup trucks, SUVs, and delivery vans. That makes it an EV company that investors might consider speculating on.
