VinFast Auto, a Vietnamese electric vehicle startup, is experiencing a significant boost in its stock value following a bullish rating from Wall Street. Analyst Dan Ives from Wedbush recently initiated coverage of VinFast (ticker: VFS), giving it a Buy rating and an impressive $12 price target.
VinFast’s Valuation and Potential
With this new rating, VinFast’s stock is now valued at approximately $25 billion. It’s worth noting that Ives has also given a Buy rating to Rivian Automotive (RIVN) shares, setting a $25 price target, which values the company at just under $25 billion. Although Rivian currently holds more cash than VinFast, when considering debt and cash, Ives’ valuations place Rivian’s worth between $20 to $25 billion. Currently, Rivian’s total worth stands at around $11 billion, while VinFast is valued at approximately $12 billion.
VinFast’s Operations and Growth
Although Rivian currently sells more electric vehicles (EVs) than VinFast, Ives recognizes the potential of the Asian auto maker. Having witnessed VinFast’s impressive operations firsthand in Vietnam, Ives was particularly impressed with the company’s EV footprint. VinFast manufactures EVs in Vietnam and has already begun construction on a new plant in North Carolina, with an estimated cost of $4 billion.
Future Projections
Ives projects substantial growth for VinFast in the coming years. He predicts that VinFast’s sales will increase from $1.4 billion in 2023 to $3.1 billion in 2024 and further rise to $5.5 billion in 2025. Additionally, he anticipates a steady reduction in operating losses, which are expected to decrease from $1.7 billion in 2023 to $1.5 billion in 2025.
VinFast Expects to Deliver 45,000 Units in 2023
VinFast, a leading automotive manufacturer, anticipates delivering approximately 45,000 units in 2023. While the specific delivery figures were not provided in the launch report, this projection highlights the company’s ambitious goals.
Additionally, it is worth noting that VinFast shares have experienced a positive trend in premarket trading, with a 3.7% increase to 5.56. In contrast, S&P 500 and Nasdaq Composite futures have shown a slight decline of about 0.2%.
Potential Volatility: Investors Beware!
Investors should be prepared for potential trading volatility following this new rating. Prior to Tuesday’s trading session, VinFast stock had experienced a slight decrease of approximately 4% over the past month. Furthermore, shares have witnessed a significant decline of around 94% since reaching an intraday high of $93 in late August. This decrease occurred shortly after the company’s merger with a Special Purpose Acquisition Company (SPAC).
It is important to highlight that VinFast stock exhibited considerable volatility post-merger. Within the 20 days after the stock symbol changed from “BSAQ” to “VFS,” shares fluctuated an average of about 35% per day. However, volatility has since diminished, with shares experiencing an average daily change of approximately 5% over the past 20 days.
Analyst Coverage and Outlook
As of now, there are three analysts covering VinFast stock. Notably, all three analysts rate the shares as a Buy. The average price target for the stock stands at $10 per share. It is worth mentioning that while this coverage is commendable, an S&P 500 company typically garners analysis from around 20 experts.