By Michael Elkins
Morgan Stanley reiterated an Overweight rating and $55.00 price target on Rivian Automotive (NASDAQ:RIVN), following the company's 4Q production and delivery numbers. Rivian announced that they produced 10,020 vehicles and delivered 8,054 vehicles in 4Q. Both came in below the street's estimates and left the company just short of its own FY22 goals.
Morgan Stanley analysts wrote in a note that "RIVN had 2k vehicles in transit at quarter end, which represents just under 5% of our FY23 sales estimate. If we are to extrapolate the production to delivery gap for our FY23 sales estimate, RIVN would need to produce 62.2k vehicles next year to reach our sales target, implying a greater than 250% increase over FY22 production, and a >60% capacity utilization of the Normal plant, which would significantly improve the company's gross margins."
According to the analysts, most investors seem to agree that RIVN needs additional capital to achieve their growth targets. They noted that according to Morgan Stanley's estimates, RIVN can get through FY23 and most of FY24 without additional capital, but there is no certainty the macro situation will improve by then.
Shares of RIVN are down 0.35% in pre-market trading on Wednesday.