By VinFast Auto stock has received a bullish endorsement from BTIG analyst Greg Lewis. Lewis initiated coverage of the Vietnamese electric vehicles start-up with a Buy rating and set a target share price of $10. He is optimistic about the company’s potential for profitability, projecting that it will break even on an Ebitda basis by 2026. This is based on anticipated sales growth from approximately $1.3 billion in 2023 to around $7 billion in 2026.
Investors have taken notice of this positive outlook, driving VinFast stock up by about 2.3% in premarket trading on Wednesday, reaching $7.21 per share. In contrast, futures for the S&P 500 and Nasdaq Composite were down 0.3% and 0.4% respectively.
Although VinFast stock experienced a drop of nearly 16% on the first trading day of the new year, it appears to be a temporary setback resulting from profit-taking. Other EV start-ups also experienced similar sell-offs. Rivian Automotive, for instance, saw its stock decline over 10% on Wednesday despite reporting solid production numbers. Nevertheless, Rivian’s shares had seen a remarkable increase of more than 30% over the past month leading up to the report.
Ever since completing a SPAC merger in August, VinFast stock has exhibited exceptional volatility. On average, shares have been fluctuating by approximately 11% daily since the merger. While volatility has slightly calmed down, they still move up or down by an average of 4% per day over the past month.
Previously, the SPAC merger had valued VinFast stock at $10 per share, totaling roughly $23 billion. Interestingly, Lewis’ fair price estimate aligns with this valuation. It is worth noting that the post-merger frenzy briefly drove VinFast shares to a high of $93, valuing the stock at over $210 billion. Conversely, shares have also dipped as low as $4.59, resulting in a company valuation of less than $11 billion.
To stabilize the stock further, more Wall Street analysts are expected to provide coverage on VinFast. Currently, four analysts cover the stock, all of whom rate it as a Buy. The average analyst price target is set at $10 per share, with price targets ranging from $7 to $12.
While VinFast’s coverage is still relatively limited compared to its counterparts, such as Rivian with 27 analysts, an increase in the number of analysts covering VinFast should help reduce volatility even further.
In conclusion, VinFast Auto stands out as a promising player in the electric vehicle industry. With a strong endorsement from BTIG analyst Greg Lewis and expectations of profitable growth, the future looks bright for VinFast.
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