American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Rivian (RIVN) stock: EV maker’s shares slip despite Fed’s rate cut

by admin September 21, 2024
September 21, 2024
Rivian (RIVN) stock: EV maker’s shares slip despite Fed’s rate cut

Rivian Automotive Inc. (NASDAQ: RIVN) saw its shares drop by 7.5% to $12.17 during Friday’s trading session, reflecting a broader market pullback after a recent rally.

The decline comes on the heels of the Federal Reserve’s unexpected decision to cut interest rates, marking the first reduction in over four years.

This move had initially buoyed Rivian’s stock and the wider market, but investors are now recalibrating their expectations amid economic uncertainties.

Rivian stock and Fed’s rate cut

On Wednesday, the Federal Reserve announced a 50 basis point cut in interest rates, lowering the federal funds rate to a range of 4.75% to 5%.

This policy shift signals a potentially more aggressive monetary easing cycle, which is expected to lower borrowing costs for businesses.

For Rivian, a prominent player in the electric vehicle (EV) sector, this could suggest a more favorable financial outlook.

However, despite the immediate positive response from the markets, the company still faces significant challenges.

Rivian remains in a critical growth phase and has yet to achieve profitability.

Although lower interest rates can ease some financial burdens, they do not eliminate the substantial capital expenditures required for manufacturing expansion, supply chain enhancements, and ongoing research and development—especially in a highly competitive industry.

The Federal Reserve’s Summary of Economic Projections hinted at rising unemployment rates through 2025, raising concerns about potential economic slowdowns.

This could adversely impact consumer demand for high-priced luxury EVs like Rivian’s R1T truck and R1S SUV.

Despite more favorable financing conditions, analysts worry that a sluggish economy may dampen sales, presenting hurdles for revenue growth.

What analysts think about Rivian Stock

Despite these challenges, Wall Street analysts generally maintain an “Outperform” rating on Rivian Automotive.

Notably, Colin Langan from Wells Fargo is particularly bullish, projecting an 80% increase in the stock over the next year.

Over the past three months, Rivian’s stock has risen by 19.48%, signaling a positive shift in investor sentiment based on improved business fundamentals.

However, Rivian is still projected to report an earnings per share (EPS) of -$0.90, which is a 24.37% increase compared to the same quarter last year.

Revenue forecasts for the upcoming quarter stand at $1.1 billion, reflecting an 18.09% decline from the previous year.

For the full year, Zacks Consensus Estimates project earnings of -$4 per share and revenue of $4.77 billion, marking increases of 18.03% and 7.67%, respectively.

These revisions in analyst estimates are crucial as they often correlate with stock performance, providing insight into market sentiment regarding Rivian’s financial health.

Challenges for Rivian

While the electric vehicle market is experiencing slower growth than in previous years, Rivian faces additional headwinds.

The company’s cost structure is misaligned with its production capacity, necessitating a cash influx before the anticipated launch of its R2 model.

As Rivian navigates these complex challenges, investors will be watching closely to see how the company adapts to shifting market dynamics and economic pressures.

Rivian (RIVN) stock may currently be in a challenging phase, but its long-term potential hinges on its ability to manage costs and adapt to evolving market conditions.

The post Rivian (RIVN) stock: EV maker’s shares slip despite Fed’s rate cut appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Qualcomm approached Intel for a takeover, WSJ reports
next post
Germany to retain Commerzbank shares as bank strives for independence

Related Posts

After Monday’s crash of Indian stock markets, here’s...

October 8, 2024

Capital One-Discover merger could put a bigger squeeze...

February 22, 2024

Oscars 2025: The hidden financial rewards beyond the...

March 3, 2025

Best Cathie Wood stocks to buy and hold...

January 19, 2025

CAC 40 index hits key price as LVMH,...

September 27, 2024

Expensive Carvana stock could soar by another 85%

October 26, 2024

Will Trump’s steel and aluminum tariffs weaken China’s...

February 11, 2025

Core Scientific deal reveals cracks in CoreWeave’s bull...

July 10, 2025

Highs today, higher tomorrow? UBS sees AI adoption...

June 26, 2025

Render’s market activity balances out after 30% weekly...

September 24, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • FBI raid on John Bolton’s home in Washington linked to classified documents

      August 25, 2025
    • Argentine senate deals blow to Milei’s austerity agenda with university budget boost

      August 25, 2025
    • Jackson Hole Symposium: what Powell said about economic effects of Trump’s tariffs

      August 25, 2025
    • At Jackson Hole, Fed Chair Powell signals possible cuts while warning of uncertainty

      August 25, 2025
    • Trump threatens to fire Fed Governor Lisa Cook amid mortgage fraud allegations

      August 25, 2025

    Categories

    • Business (3,763)
    • Investing (2,783)
    • Latest News (2,048)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved