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RBC Capital reiterated an Outperform rating and $62.00 price target on Rivian Automotive Inc (NASDAQ:RIVN) following the release of the company’s 3Q delivery and sales numbers. RIVN reported it delivered 6,584 vehicles and produced 7,363 vehicles in 3Q22. The consensus estimate for deliveries was 7.0k.
Analysts believe that a component shortage likely weighed on RIVN’s ability to accelerate production in the quarter. Likewise, they believe deliveries were challenged by increased delivery times with the switch to rail and possibly some challenges in securing vehicle transportation capacity during peak times.
RIVN’s last official production update implied that from 5/9-6/30 it produced an average of 404 vehicles/week. The 7,363 vehicles produced in the quarter equates to an average production rate of 566 vehicles/week, a new record weekly rate. However, the analysts believe that, based on foot traffic, it’s possible the exit rate was even higher.
They wrote in a note, “RIVN did reiterate its 25k production target for the year, and we believe that should provide a boost to investor confidence. While Visible Alpha doesn’t seem to have good/consistent/critical mass for 2022 production forecasts (which is what RIVN guides to), it does have 2022 deliveries at 22.5k. To us, this likely suggests implied consensus production estimates are likely higher than 22.5k, but below the 25k guidance.”
YTD Rivian has produced 14,317 vehicles, implying the company needs to produce about 10.7k or around 822/week for the remainder of the year. The supply chain has been the limiting factor YTD and management indicated they are in the process of hiring for and ramping a second shift, which RBC takes as an indication the supply constraint is easing.
Shares of RIVN were up 9.09% in mid-day trading on Tuesday.
