UBS believes that Rivian’s recent gains have pushed its valuation too high. The bank downgraded the electric vehicle manufacturer to sell from neutral. Analyst Joseph Spak raised his price target to $15 from $13, but that’s still about 20% below Tuesday’s close. Shares have been on a tear recently, surging more than 43% over the past three months. However, Spak thinks Rivian’s risk-reward ratio now appears less favorable, saying the company’s current valuation may be too inflated. RIVN 1Y mountain RIVN 1Y chart “RIVN stock has been prone to sentiment swings (often driving stock more than fundamentals) and the stock is +15% since Autonomy and AI Day on Dec. 11 (vs. S & P500 +1%) as the market assigned more enthusiasm to their AI potential. However, in our view, most of the AI related news is ‘out,'” he wrote. The analyst also believes that expectations may be too high around the launch of Rivian’s R2 vehicle, due in the first half of the year. Spak added that his sales forecasts for 2026 and 2027 are 16% and 19% below consensus. “We believe early customers are likely current RIVN owners or early adopters, and we see risk they wait for the latest and greatest R2 (that may be available ~2 qtrs later),” he clarified. “Further, we see a tougher U.S. [battery electric vehicle] environment with the absence of the EV tax credit and a pull back in regulations, which means R2 will compete against broader ICE/hybrid offerings, not just BEVs.” The analyst added that he sees limited autonomous vehicle catalysts in the near term.
