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Wells Fargo cuts Rivian’s Price Target Ahead of Q1 Earnings Release

Ahead of Rivian Automotive’s (NASDAQ:RIVN) 1Q earnings release scheduled for Tuesday after the closing bell, Wells Fargo Bank has reiterated an Equal Weight rating on the stock and cut its price target to $14.00 from $18.00. In a note, Wells Fargo analysts updated their estimates to reflect Q1 deliveries and the recent debt issuance. The analysts noted that Q1 deliveries of 7,946 outperformed their estimate of 7,010, but they lowered their EPS estimate given current negative margins.

Despite Wells Fargo Bank holding their 50K delivery forecast in-line with Rivian’s guidance. They remain slightly worse than the company’s adjusted EBITDA guide of -$4.3B, at -$4.5B. Additionally, the analysts cut FY23 EPS estimates from -$5.90 to -$6.00 to reflect negative contribution on higher Q1 unit output. They also cut FY24, FY25, FY26, and FY27 estimates to reflect higher interest expense on Rivian’s recent $1.3B Green bond issuance.

In March, Rivian issued $1.3B in green convertible bonds

Bringing their cash balance to over $12B after burning through $6.4B in 2022. In pre-market trading on Monday, shares of Rivian stock RIVN were up 0.45%. Reflecting the market’s response to the updated estimates from Wells Fargo.