Rivian Automotive, a prominent player in the electric vehicle (EV) market, is facing potential profit risks as the industry experiences a slowdown. This development has prompted Barclays to downgrade the stock, causing a 3.5% drop in Rivian’s stock value. The bank’s decision was influenced by the challenging market conditions for EVs and the potential impact on Rivian’s profitability.
The news comes at a time when several companies are making headlines in the stock market. Hershey, the renowned chocolate maker, experienced a 1% decline in its shares after Morgan Stanley downgraded them due to weak consumer demand and high cocoa inflation affecting profit margins. On the other hand, Rocket Lab saw a 1% increase in its stock value as Citi reinstated coverage with a buy rating. The company’s improved liquidity conditions and a recent $515 million award from the Space Development Agency indicate growing traction with the U.S. government.
Teva Pharmaceutical Industries witnessed a 3% surge in its shares following an upgrade by Piper Sandler to overweight from neutral. The upgrade was based on Teva’s strong brand portfolio and improving capital structure, positioning the company for recovery and expansion. Lowe’s, the home improvement retailer, also experienced a positive shift with a 1.7% increase in its stock value after JPMorgan raised its rating to overweight from neutral. The bank predicts that expected rate cuts from the Federal Reserve will lead to lower mortgage rates, benefiting Lowe’s business.
However, XPO, a shipping company, faced a setback as its shares slipped by 2.4% due to a downgrade by Morgan Stanley. The bank expressed concerns that optimism surrounding XPO’s acquisition of bankrupt Yellow Corp’s service centers may be overinflated. Urban Outfitters, on the other hand, witnessed a more than 2% rise in its shares after an upgrade from UBS ahead of its fourth-quarter earnings release. UBS expects the retailer to beat earnings per share estimates and maintain solid sales momentum.
New York Community Bancorp saw a 1.2% increase in its shares, building on the gains from the previous week when insiders of the troubled firm used their own money to buy shares. Bank of America Securities reiterated a neutral rating on the stock but acknowledged that leadership has the potential to turn things around. Marqeta, a card issuing technology company, experienced a 6.5% premarket rise in its shares after a Bank of America upgrade to buy from neutral. The bank believes that the recent pullback in the stock is overdone and presents an opportunity for investors.
In contrast, Big Lots, a discount retailer, faced a significant setback with an over 11% decline in its shares. Loop Capital downgraded the stock to sell from hold, citing a loss of customer relevance and a worsening financial situation.
The downgrade of Rivian Automotive’s stock by Barclays highlights the challenges faced by the electric vehicle market. As the industry experiences a slowdown, companies like Rivian may face profit risks. However, it is important to note that the overall stock market is witnessing mixed performances, with some companies benefiting from upgrades and positive market sentiment, while others face downgrades and setbacks.
Investors will closely monitor how Rivian and other companies navigate these challenging market conditions and whether they can adapt and thrive in the evolving landscape of the electric vehicle industry.
