Rivian's stock just had its best day ever - and now this analyst says to sell

By William Gavin

D.A. Davidson worries that Rivian's guidance would require the company to see an unusually strong debut of its R2 EV

Rivian Automotive has big expectations for the R2, an electric midsize SUV designed to be more affordable than its premium R1S R1T vehicles.

Rivian Automotive has shareholders eager for what its CEO described as a potential "inflection point." However, one analyst is pouring some cold water on that optimism.

The issue in question is Rivian's (RIVN) R2, an electric midsize SUV set to go on sale in the second quarter, a little more than two years after the company first unveiled its plans for the vehicle. While the company is upbeat that a new, cheaper vehicle can appeal to customers in what's become a tough market for EV sales, D.A. Davidson analyst Michael Shlisky expressed worries that Rivian's recent guidance reflects assumptions that may be too rosy.

"To make its current outlook, Rivian will have to deliver the best mid-size EV launch since 2021 - without the benefit of tax credits or a mass-channel dealer network," Shlisky cautioned in a Tuesday note.

Shlisky downgraded the stock to underperform from neutral and lowered his price target to $14 from $15. Rivian's stock rose more than 26% on Friday in what was its largest one-day percentage gain on record, coming on the heels of earnings that largely beat expectations.

The stock fell more than 7% on Tuesday to trade at about $16.47 a share.

Rivian forecast deliveries of as many as 67,000 electric trucks and SUVs, a 58% increase compared with 2025. The low end of the company's guidance calls for deliveries of 62,000 units, which would still be a jump of more than 46%.

Rivian is set to reveal more about the R2 model on March 12, including specific pricing and trim details. The R2 is expected start at about $45,000, which would make it the cheapest of Rivian's current lineup.

"From the lens of the customer, if you want to buy a midsize SUV with robust technology, autonomous capabilities and a reasonable price point, you've really only got one choice - and it's been that way for a long time," Rivian CEO RJ Scaringe said on a call with analysts last week, seemingly referring to the Tesla (TSLA) Model Y.

"This is a reflection of a market that's being underserved. We believe R2 is going to change that," he added.

That may be easier said than done.

"We think the R2 will be compelling, but a lot has to go right for Rivian to make its numbers this year," Shlisky said. He added that the company's outlook for the R1S and R1T vehicles appears below expectations and that the R2 launch is "not without significant risks."

For Rivian to meet its deliveries goal, it will likely need to sell between 20,000 and 25,000 R2 vehicles in its first year on the market. Of EV models launched after the pandemic and priced between $40,000 and $50,000, only Ford Motor's (F) Mustang Mach-E sold around that many units during its first year on the market, according to D.A. Davidson.

See: Jeep maker Stellantis facing worst-ever stock rout as it takes $26 billion hit over miscalculating EV demand

Shlisky also noted that the Mustang Mach-E benefited from heavy discounting, higher gasoline prices, national dealer networks and tax credits that expired last September. Electric-vehicle sales in the U.S. fell 36% in the fourth quarter of 2025 compared with a year earlier, marking a disappointing end to an otherwise strong year, according to Cox Automotive data.

Several automakers, including Ford, have started to pull back on EVs to account for the less-friendly market, which Scaringe has said actually benefits Rivian. On last week's earnings call, he added that Tesla's decision to stop making the Model S and Model X luxury EVs also creates an "opportunity" to sell more of Rivian's premium vehicles.

Rivian's focus on developing autonomous-vehicle technology and improving vehicle costs, among other factors, has made some analysts more bullish than D.A. Davison's Shlisky. Deutsche Bank reiterated a buy rating with a $23 price target, while Stifel maintained its buy rating and lifted its target to $20 from $17.

See: Rivian teases its AI future, but its stock drop shows Wall Street isn't impressed

-William Gavin

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02-17-26 1639ET