EV maker Rivian (RIVN) is giving back 3% today after wealth manager Bernstein started coverage of the shares with an Underperform rating.
Why Bernstein Is Bearish on RIVN
Bernstein believes that the automaker can achieve its goal of handing over 500,000 EVs by 2030, but the wealth manager does not believe that RIVN’s attainment of this milestone will provide its shareholders with “financial success.”
A state-of-the-art electric vehicle charging at a station at a suburban mall.
That’s because, according to Bernstein, the company’s gross margins will only be about 15% by the end of this decade. Additionally, Bernstein believes that Rivian will burn $14 billion of cash before it breaks even.
Finally, RIVN will be hindered by the decelerating growth of its markets, stepped-up competition, and the relatively low ceiling of its addressable market, Bernstein warned.
The wealth manager placed a $6.10 price target on the name.
Rivian Not “Particularly Worried” by Trump’s Policies
On Jan. 23, RIVN CEO RJ Scaringe said that he was not “particularly worried” about the Trump administration’s anti-EV stance.
“I don’t think we’re particularly worried about any of it because whatever happens will be equally applied to all, I think in the end it’s sort of like there’s small speed bumps along the way and it’s on us to respond to whatever that environment is,” the CEO explained.
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This article is originally published at Insider Monkey.
