An unwinding in call options could fuel more headwinds
Shares of electric vehicle (EV) maker Rivian Automotive Inc (NASDAQ:RIVN) are sinking this morning, off 2.6% at $11.06, at last check. Driving the shares lower is a downgrade to "neutral" from "overweight" and price-target cut to $13 from $19 out of Piper Sandler, the brokerage citing unidentifiable growth catalysts for 2025, brushing off the company's broader strategic strengths.
RIVN posted a narrower-than-expected fourth-quarter loss back in February, but the beat was overshadowed by a grim delivery forecast for this calendar year. Today's pullback has pushed the shares below their year-over-year breakeven mark, with overhead resistance looming at the formerly supportive 260-day moving average.
Analysts were leaning bearish ahead of today's session, with 17 of 27 in coverage maintaining a tepid "hold" or worse recommendation. However, more bear notes could be in store, with 10 brokerages carrying a "buy" or "strong buy," and the stock's average 12-month price target of $14.89 sitting at a 31% premium to Wednesday's close.
Digging deeper, options traders have been optimistic, meaning an unwind could fuel more headwinds. Specifically, the equity's 50-day put/call volume ratio of 3.85 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the highest percentile of its annual range. Further, RIVN's Schaeffer's put/call open interest ratio (SOIR) of 0.57 sits in the 6th percentile of readings from the past year.