Barclays analyst Brian Johnson reflected on Rivian (NASDAQ:) ahead of the company’s Q1 earnings report with a special focus on the production ramp.
Earlier this month, Rivian said it produced 2,553 electric vehicle (EV) units in Q1 with 1,227 deliveries, much below Johnson’s estimate of 1,800 deliveries.
“Although 1Q deliveries lagged expectations, we believe the production rate exiting 1Q supports RIVN’s FY’22 production guidance of 25k units. With RIVN having reported 1,410 units of production YTD as of March 8, 2022 vs 2,553 units overall in 1Q, we estimate an exit rate of ~410 units per week. Even assuming that weekly run-rate holds for all of 2Q, it still implies ~5,350 units of production, and FY’22 production of ~18,600. Our base case of 25k units for FY’22 assumes the 2Q average weekly rate improves by ~10% vs the 1Q exit rate with a further ~25% improvement in 2H vs 2Q,” Johnson said in a client note.
The analyst has slashed the Q2 delivery estimate to 4,150 from 4,910 prior. As a result, the analyst cut the Q1 EPS estimate to -$1.35 but still better than the -$1.43 consensus. As a result, the price target goes to $38.00 per share from $42.00.
Rivian stock price closed at $33.90.
By Senad Karaahmetovic