Wells Fargo cuts estimates on Rivian ahead of 1Q release Tuesday

Wells Fargo reiterated an Equal Weight rating on Rivian Automotive (NASDAQ:) and cut their price target on the stock to $14.00 (From $18.00) ahead of the company’s 1Q earnings release. The electric vehicle maker is scheduled to report results after the closing bell on Tuesday.

Wells Fargo analysts wrote in a note, “We are updating our estimates to reflect updated Q1 deliveries & the debt issuance. Q1 deliveries of 7,946 outperformed our 7,010 estimate; therefore, we are lowering our EPS est. given current negative margins. We remain slightly worse than RIVN’s adj EBITDA guide of -$4.3B, at -$4.5B, and we hold our 50K delivery forecast, in-line with guide though below the 62K internal target reported by the media.”

Wells Fargo cut FY23 EPS estimates from -$5.90 to -$6.00 to reflect negative contribution on higher Q1 unit output. They also cut FY24 estimates from -$5.60 to -$5.65, FY25 from -$5.75 to -$5.80, FY26 from -$5.25 to -$5.30 and FY27 from -$4.10 to -$4.15 to reflect higher interest expense on recent $1.3B Green bond issuance.

RIVN issued $1.3B in green convertible bonds in March, bringing their cash balance to >$12B after burning through $6.4B in 2022.

Shares of RIVN are up 0.45% in pre-market trading on Monday.