By Claudia Assis
Rivian Automotive Inc. stock rallied Wednesday after Wall Street viewed the electric-vehicle maker’s quarterly sales and production numbers as boding well for Rivian’s 2022 targets.
Rivian /zigman2/quotes/230726939/composite RIVN +2.55% earlier Wednesday reported that it delivered 4,467 vehicles and produced 4,401 vehicles in second quarter. It also kept its target of producing 25,000 vehicles this year.
The consensus delivery forecast was around 3,500 vehicles, Joseph Spak at RBC Capital said in a note.
The EV maker’s stock was recently up nearly 11%. Rivian shares have lost 71% so far this year, compared with losses of around 20% for the S&P 500 index. /zigman2/quotes/210599714/realtime SPX +0.19%
The news was “a modest positive” for Rivian, Davidson analyst Michael Shlisky said in a note. It also meant that Rivian’s production rates, however, “must double from here in (the second quarter of the year),” the analyst said.
Deliveries were “stronger than expected,” Joseph Spak at RBC Capital said in a note. “We believe the results should boost investor confidence in 2022 targets.”
Spak also noted the steeper production ramp that Rivian will have to meet in the second half of the year.
The production numbers imply that Rivian was able to build about 404 vehicles a week at its Normal, Ill., plant toward the end of second quarter, compared with about 260 vehicles a week from March to May, he said.
Rivian may need to make about 687 vehicles a week for the remainder of the year to meet its goals, he said.
The EV maker could accomplish that by “continued improvement on the current shift and the addition of a second shift, which we believe will occur in August,” a major catalyst for the company, Spak said. Supply-chain problems could be a limiting factor, the analyst said.
Rivian is expected to report second-quarter results next month, with consensus on FactSet calling for an adjusted loss of $1.60 a share on sales of $311 million. That would compare with a loss of 66 cents a share and no revenue in the second quarter of 2021.
The post-results call with analysts will likely focus on “gross margins, cash burn, and qualitative commentary that gives investors more confidence in the (25,000) production target,” Spak said.
Although Rivian is expected to post losses “for the foreseeable future,” the company was sitting on close to $15 billion of net cash at the end of March, nearly 60% of its market cap, CFRA analyst Garrett Nelson said.
That “should provide it with a greater degree of flexibility versus other EV startups as it continues to ramp production,” Nelson said, keeping his equivalent of a neutral rating on the stock.