Rivian (NASDAQ: RIVN), a once popular stock among analysts, has suffered large drawdowns to the tune of 69% year-to-date (YTD). Further, on July 11, the company discussed its restructuring plans, claiming that it has grown too fast and needs to cut roughly 5% of its workforce. Moreover, Morgan Stanley (NYSE: MS) cut its coverage across the auto stocks on July 14, citing headwinds and slower-than-expected growth. Despite MS cutting their estimates by 5% to 10%, the cuts are generally smaller than in previous recessionary scenarios.
RIVN chart and analysis
Over the last month, RIVN is up 8.7%, currently showing a bull flag pattern, which occurs when prices pull back slightly after a strong rise up. The long-term trend is still negative, but the short-term trend is positive, with investors possibly keeping a closer watch on the stock. For now, the support line is at $27.01, while resistance resides in the zone between $31.77 and $32.35. Analysts rate the shares a moderate buy, predicting that the average price the stock could reach in the next 12 months is $50.87, 60.98% higher than the current trading price of $31.60. Recovery of auto stocks may, in fact, be protracted if the supply chain issues continue pressuring all aspects of the economy. Furthermore, rising interest rates and a possible recession could further exacerbate the issues the auto industry is facing, so investors may expect more volatility in the near term. Buy stocks now with Interactive Brokers – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
