Rivian Automotive (RIVN 6.10%) stock is parked in a lot fewer portfolios today. Shares of the electric vehicle (EV) upstart plunged on Tuesday morning, extending the decline they endured yesterday.
While EV investors who clicked the sell button had their reasons, those who still count Rivian stock among their holdings -- or those interested in buying the stock -- are wondering what to do next. Let's take a look to see what investors' next move should be with regard to Rivian stock.
Season that price target with some grains of salt
Although it shook the resolve of some investors, an analyst's price cut yesterday shouldn't be interpreted as the final word on Rivian stock. Oftentimes, analysts have shorter investing horizons than the multiyear holding periods of long-term investors, so the $16 price target that Barclays analyst Dan Levy assigned should be taken with a grain of salt. In fact, there's nothing that the company has reported in the past couple of days that should change the conviction of those who had been bullish on Rivian stock before Levy shared his price target.
Is now the time to idle or drive forward with an investment?
Despite the current skepticism about Rivian stock, there are reasons to be optimistic about the company's long-term prospects. Most notably, the company is developing a second manufacturing facility in Georgia, where it plans on producing its next vehicle, R2 -- a more affordable offering than its current model, R1. For EV enthusiasts who can't fit the R1 into their current budgets, the R2 could be a more feasible option, contributing to increased demand.
With Rivian set to present fourth-quarter 2023 financial results on Feb. 21, the majority of investors would be best-suited to sit pat and wait to see what the company reports. Those who are more tolerant of risk, however, could act now and buy Rivian stock during the current sell-off.
