03:18 PM EDT, 10/07/2024 (MT Newswires) -- Rivian Automotive's ( RIVN ) Q4 gross profit target is at risk due to a "bleaker" production outlook and cautious delivery estimates, UBS Securities said in a note emailed Monday.

The investment firm said it now expects a Q4 gross loss of $126 million, adding that the electric automaker should still benefit from lower of cost and net realizable value, or LCNRV, as well as higher credit revenue in the quarter.

Rivian's Q3 deliveries fell short of consensus forecasts and supply chain issues affected production guidance, UBS said. The company delivered 10,018 units in Q3, nearly 17% below expectations and down 27% quarter-over-quarter. 2024 delivery guidance is now at 50,500 to 52,000 units, implying nearly 13,850 in Q4, though market confidence in the "large ramp" remains uncertain, UBS said.

Production guidance was lowered to 47,000 to 49,000 units due to a component shortage, UBS said. "This supply shortage impact began in [Q3], has become more acute in recent weeks, and continues. So, this is likely why [Q4] production is lower, but it doesn't explain the softer deliveries" in Q3, it added.

UBS has a neutral rating on Rivian and lowered its price target to $11 from $16.

Price: 10.34, Change: -0.10, Percent Change: -1.01