Immediately two analysts have downgraded the stock of rival Tesla. Time to sell?

Shares of electric pickup truck maker Rivian Automotive fell 7.2% to $17.5 in Wednesday trading after analysts at UBS and Wolfe Research advised selling the stock. They considered the value overvalued after the quotes rose 43% over the past three months.

The rally was sparked by a string of positive news. The release of Rivian's R2 pickup truck models, scheduled for early this year, may partially offset the negative effect of the repeal of the $7500 federal tax credit for electric vehicle purchases, Barron's believes. The market is also waiting for the implementation of the announced autonomous driving program: in December, Rivian held an Autonomy & AI Day event, where it presented its own chip for unmanned driving systems and related software. The company plans to introduce a driverless point-to-point travel mode, providing it on a subscription basis - similar to Tesla's strategy with its Full Self-Driving product.

UBS believes the recent rise in Rivian's stock has led to its overvaluation, CNBC writes. Analyst Joseph Spak downgraded the electric car manufacturer from neutral to "sell". At the same time, he slightly increased the target price of the company's securities - from $13 to $15, but this target is lower than the current quotes - by 14.3%.

"Rivian shares are prone to sentiment-driven fluctuations (often affecting quotes more than fundamentals)," CNBC quoted Spack's note as saying. He recalled that since the presentation of a new AI chip for autonomous driving, the automaker's papers have added 15%, while the S&P 500 index has gained only 1%. "The market has shown increased enthusiasm for the company's AI potential. However, in our view, much of the AI-related news is already priced in," the analyst wrote. He doesn't expect meaningful upside drivers for Rivian's stock in autonomous driving anytime soon.

Spak also warned that excessive expectations have formed around the upcoming launch of the R2 model. UBS' forecasts for the company's total sales for 2026 and 2027 are 16% and 19% below the Wall Street consensus, respectively. "We believe the first buyers will be existing Rivian customers or early enthusiasts, and there is a risk that they will prefer to wait for the newest and most advanced version of the R2, which could arrive about two quarters later," the analyst explained.

The manufacturer sold about 42,000 cars in 2025, compared to 52,000 in 2024. The Wall Street forecast calls for an increase to 68,000 cars in 2026, Barron's reports.

Wolfe Research analyst Emmanuel Rosner also abandoned his neutral stance on Rivian shares and recommended selling them, setting a target price of $16, Barron's writes. This is 8.5% lower than the current one. According to Rosner, the effect of Rivian's subscription model for autopilot and other developments in autonomous driving won't be seen until the end of 2026. Until then, Rivian will face a "catalyst vacuum" - a lack of meaningful reasons for growth. He also noted that the current quotes already partially incorporate demand for the new R2 pickup model.

That said, Tesla, unlike Rivian, will have a "constant stream of news" in AI, from robotaxis to humanoid robots, as the analyst expects.

Wall Street's views on Rivian's prospects are divided. According to MarketWatch, of the 27 investment banks tracking the automaker's stock, 12 advise holding it in a portfolio. Eight analysts recommend buying these securities, and the same number recommend selling. Three months ago, the company had only four bearish ratings.

The Wall Street consensus price target is $17, suggesting a 2.9% drop from the Jan. 14 close.

This article was AI-translated and verified by a human editor