Truist Securities expects $Rivian Automotive (RIVN.US)$ shares to be stuck in the mud short term as the company embarks on a planned shutdown of its manufacturing facility.

What To Know: Truist Securities analyst Jordan Levy on Monday downgraded Rivian from Buy to Hold and slashed the price target from $26 to $11, citing capital needs concerns related to the multi-week plant shutdown planned for the second quarter.

Rivian shares tumbled last week after the EV maker reported quarterly results and issued weak production guidance for 2024. The company said it expects to produce 57,000 vehicles this year versus estimates of 81,000. The weak guidance was largely due to the planned shutdown of Rivian's production facility.

"While RIVN's strong execution should be noted and we remain constructive on the value of the vertically integrated model/differentiated brand, we see imminent capital needs continuing to put a ceiling on shares as RIVN enters an extended plant shutdown period driving flat YoY volumes," the Trust Securities analyst said in a new note to clients.

Truist now expects Rivian to generate $4.3 billion in revenues in 2024 versus its prior expectations for $6.2 billion in revenue. The analyst firm also now sees a more "elongated" path to positive free cash flow with volume growth poised to take a pause this year.

"While we had noted for several quarters that Street estimates needed to come down to properly account for the shutdown, we'd previously expected some level of growth out of RIVN in 2024 despite the shutdown," Levy said.

Looking further ahead into 2024, Truist saw limited catalysts for Rivian that could drive momentum back into the stock. Instead, the analyst firm wrote that the company's capital needed to emerge as the theme this year.

Rivian reiterated its initial 2026 production and delivery timeline for the R2 platform, which Truist believed will be an important step for the company in reaching a broader customer base, but it was still a long way away, Levy said.

"Given first production is still two years out we expect capital needs/cash burn to drive the narrative for the coming quarters," the analyst said.

Truist remained optimistic about the long-term potential of Rivian in the future EV landscape, but following the company's disappointing quarterly results, the analyst firm said that the risk/reward profile had become more balanced.

RIVN Price Action: Rivian shares are down approximately 35% over the last five trading sessions. The stock was up 6.31% at $10.71 Monday morning, according to Benzinga Pro.