Shares of Rivian Automotive Inc. took a dive Monday, within the wake of the electric-vehicle maker’s recall of almost all of its autos, however Wedbush analyst Dan Ives mentioned the information is only a “pace bump” that doesn’t derail the bullish outlook.
That mentioned, Ives acknowledged that the recall for a steering security concern is a “black eye for Rivian,” and comes at a time that the corporate is simply beginning to hit its stride on reaching its 25,000-EV manufacturing goal for the 12 months.
The corporate
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mentioned after Friday’s closing bell that it plans to recall about 13,000 autos to repair improperly put in fasteners that might trigger drivers to lose steering management, with The Wall Avenue Journal observing that represented “almost all” of the corporate’s autos.
The inventory sank 6.5% in premarket buying and selling Monday, after falling 7.6% on Friday earlier than the recall information surfaced.
“The very last thing any Rivian investor needs to see in a shaky market is a broad recall that hurts the model and provides some lingering credibility points to manufacturing going ahead,” Wedbush’s Ives wrote in a observe to purchasers.
He mentioned that whereas bigger auto makers usually have recollects, Rivian is below a “shiny highlight” as it’s nonetheless in “show me” mode with buyers. The WSJ report famous that the recall was Rivian’s third since manufacturing started final 12 months.
Nonetheless, Ives reiterated the outperform ranking he’s had on the inventory since December, which was a couple of month after Rivian went public. He additionally stored his value goal at $45, which implied about 33% upside from Friday’s closing value of $33.95.
Ives mentioned the recall is a “pace bump” in Rivian’s development story, however he doesn’t consider it should preserve the corporate from assembly its 2022 manufacturing or supply objectives. That’s in fact until one other shoe drops, Ives mentioned.
The inventory has gained 6.1% over the previous three months however has plunged 67.3% 12 months so far by way of Friday, whereas the S&P 500 index
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has misplaced 6.7% the previous three months and dropped 23.6% this 12 months.