Barclays analyst Brian Johnson reflected on Rivian (NASDAQ:) ahead of the company’s Q1 earnings report with a special focus on the production ramp.

Earlier this month, Rivian said it produced 2,553 electric vehicle (EV) units in Q1 with 1,227 deliveries, much below Johnson’s estimate of 1,800 deliveries.

“Although 1Q deliveries lagged expectations, we believe the production rate exiting 1Q supports RIVN’s FY’22 production guidance of 25k units. RIVN has reported 1,410 units of production YoTD by March 8th 2022, compared to 2,553 overall units in 1Q. This gives us an exit rate estimate of 410 units/week. Even assuming that weekly run-rate holds for all of 2Q, it still implies ~5,350 units of production, and FY’22 production of ~18,600. Our base case of 25k units for FY’22 assumes the 2Q average weekly rate improves by ~10% vs the 1Q exit rate with a further ~25% improvement in 2H vs 2Q,” Johnson said in a client note.

An analyst reduced the Q2 delivery estimate from 4,910 to 4,150. The analyst reduced the Q1 expected EPS to -$1.35, but it is still higher than the consensus of -$1.43. Therefore, the price target has been reduced to $38.00 per Share from $42.00

The closing price of Rivian stocks was $33.90

By Senad Karaahmetovic