Spencer Platt
Rivian Automotive (NASDAQ:RIVN) fell in early trading on Monday after announcing a recall for nearly all of the 13K vehicles the electric vehicle maker has produced.
While the simple recall is tied to a structural issue with the torqued fastener which should be easily resolved in vehicles once they are brought in for service, analysts see it as a black eye for the company in the near term just as production ramps up.
“The last thing any Rivian investor wants to see in a shaky market is a broad recall that hurts the brand and gives some lingering credibility issues to production going forward,” noted Wedbush Securities analyst Dan Ives.
He noted that recalls are fairly typical in the auto sector, but Rivian (RIVN) is under a bright spotlight for the Street and in a major prove me mode.
The development is considered a speed bump in the Rivian (RIVN) growth story, however it does not knock off the firm off an Outperform rating and price target of $45 with the 2022 production and delivery targets seen still being in play of being met.
Shares of RIVN fell 6.60% in premarket action on Monday to $31.71 vs. the post-IPO range of $19.25 to $179.47.
