Wells Fargo sees limited operating leverage for Rivian, with adjusted EBITDA expected to stay roughly flat despite deliveries being projected to double.

  • Wells Fargo raised its price target to $16 from $15 but kept an ‘Equal Weight’ rating, according to The Fly.
  • Morgan Stanley said Rivian must successfully execute on autonomous technology, production scaling, and cost reductions to achieve sustainable profitability.
  • Rivian upped its full-year 2026 delivery guidance to 65,000 and 70,000 units, compared to 62,000 to 67,000 units.

Shares of Rivian Automotive (RIVN) fell nearly 8% on Friday, with Wall Street flagging profitability challenges for the electric vehicle maker despite stronger-than-expected second-quarter results and an improved outlook.

RIVN stock is also on track to post its biggest monthly decline since January.

RIVN Raises FY26 Guidance

The company reported second-quarter revenue of $1.66 billion, up 27% from a year earlier, and posted an adjusted loss of $0.47 per share, with both figures beating Wall Street expectations, as per Fiscal.ai.

Rivian improved its full-year forecast to an adjusted EBITDA loss between $1.8 billion and $2.0 billion from an earlier guidance of a loss of $1.8 billion to $2.1 billion. Its expected vehicle deliveries for the year now stand between 65,000 and 70,000, compared to 62,000 to 67,000 units.

Wall Street Remains Cautious On Profitability

Despite the beat, Wells Fargo remained cautious. The firm said the guidance increase was driven largely by regulatory credit sales and sees limited operating leverage, as adjusted EBITDA is expected to remain roughly flat between the first and second halves of the year even though deliveries are projected to double. The firm raised its price target to $16 from $15 but kept an ‘Equal Weight’ rating, according to The Fly.

Morgan Stanley raised its target to $14 from $13 but maintained an ‘Underweight’ rating, warning that Rivian is entering a “high-risk production ramp phase.” The firm said the upcoming R2 SUV could generate strong demand, but Rivian must successfully execute on autonomous technology, production scaling, and cost reductions to achieve sustainable profitability.

Meanwhile, RBC Capital said that while early reviews of the higher-end R2 trim have been positive, it wants to see how the more affordable standard versions perform and gain greater confidence that Rivian can earn sustainable profits from the vehicle before “getting constructive.” It raised the price target to $16 from $14 and kept a ‘Sector Perform’ rating.

Retail Highlights RIVN’s ‘Road To Profitability’

Retail sentiment surrounding RIVN on Stocktwits turned ‘neutral’ from ‘bearish’ a day earlier, amid a 200% jump in message volumes.

One user said the “road to profitability” rests on R2 volumes and increasing software sales.

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Another user highlighted support at $15.5. It is currently trading at $15.63.

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RIVN stock has declined more than 19% so far this year, compared with Tesla’s 30% slump.

Also read: NVO Stock Slumps After Late-Stage Trial Fails Primary Goal – Retail Says ‘Current Revenue Drivers’ Still Intact

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