REE Automotive cut to Hold on low revenues, macro concerns

REE Automotive (NASDAQ:REE) was downgraded by Cantor Fitzgerald on Friday as a slower than expected ramp up of production into difficult macro conditions raises concerns.

Equity analyst Andres Sheppard explained that while he still believes in the company’s “highly-customizable product offering that is technologically agnostic and suitable for a wide range of vehicles” as well as the less capital intensive business model. However, lower than expected revenues and growing pains push him to the sidelines from a prior Buy rating.

“We have become a bit-more conservative in the short term, and thus downgrade REE to Neutral from [Overweight], and we lower our PT to $1 from $2, given a slower-than-anticipated ramp-up, lower-than-anticipated revenues, continued supply chain disruptions, and difficult macro conditions,” Sheppard explained. “In our model, we now don't expect the company to generate material revenues until 2H24E.”

He also substantially reduced his targets for units sold in 2023 and 2024, cutting estimates by 94% and 63%, respectively.

Read more on the company’s recent earnings result.