JP Morgan Trims Rivian’s Price Target to $9.00 After Q2 Results
JPMorgan analyst Ryan Brinkman cut on August 6, 2025, Rivian’s PT to $9.00 (from $10) while maintaining an ‘Underweight’ rating.
“We are lowering our estimates and price target for Rivian shares after the firm reported a bigger than expected 2Q EBITDA loss yesterday while warning it was likely to generate an even larger full year EBITDA loss, on account of more strongly negative automotive gross margin, given operational inefficiencies and the earlier than expected phase-out of various EV subsidies.
2Q revenue was above expectation, at $1,303 mn vs.
Bloomberg consensus for $1,283 mn and JPMe at $1,211 mn heading into the quarter, although most other metrics tracked worse, including automotive regulatory credit revenue of just $3 mn vs.
JPMe $107 mn, as legislation since the time of 1Q earnings removed any penalty for non-compliance with U.S.
Environmental Protection Agency (EPA) greenhouse gas (GHG) and National Highway Traffic Safety Administration (NHTSA) Corporate Average Fuel Economy (CAFE) regulations, negating other automakers’ need to purchase credits granted Rivian and other battery electric vehicle manufacturers, at least the federal level, and as separate legislation targeted the strengthening of other state-level Zero Emission Vehicle (ZEV) credit trading practices, such as administered by the California Air Resources Board (CARB).
However, underlying automotive gross margin exclusive of regulatory credits also tracked worse, at -36% in 2Q, well below the -11% we had modeled, resulting in combined automotive and regulatory credit gross profit loss of -$335 mn vs.
JPMe -$90 mn.
Software & Services gross profit was a bit better (+$129 mn vs. JPMe +$75 mn) and operating expense slightly less ($908 mn vs.
JPMe $959 mn), such that the 2Q EBITDA miss vs. our model (-$667 mn vs.
JPMe -$535 mn and consensus -$493 mn) was driven primarily by core automotive gross margin (arguably the company’s #1 performance metric), which remains frustratingly negative.”
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