BTIG Analyst Predicts Bright Future for Vietnamese EV Start-Up
BTIG analyst Greg Lewis has initiated coverage of VinFast Auto stock with a Buy rating and a price target of $10 per share. Lewis believes that the Vietnamese electric vehicle start-up has the potential to break even on an EBITDA basis by 2026, fueled by a projected increase in sales from around $1.3 billion in 2023 to approximately $7 billion in 2026. Sustained growth and eventual profitability position VinFast as one of the winning players in the industry.
Share Price Reacts to Bullish Call
The positive outlook from BTIG has influenced the market, causing VinFast stock to rise by about 2.3% in premarket trading on Wednesday, reaching $7.21 per share. In contrast, S&P 500 and Nasdaq Composite futures were down 0.3% and 0.4% respectively during the same period.
It is worth noting that VinFast stock experienced a significant drop of nearly 16% on Tuesday, the first trading day of the new year, following a broader sell-off of EV start-up shares. However, this decline could be attributed to profit-taking rather than a reflection of the company’s fundamentals.
Rivian Automotive stock also witnessed a substantial decrease of more than 10% on Wednesday after reporting solid production numbers. Despite this decline, Rivian shares had risen more than 30% over the course of the month leading up to the report.
Volatility Persists for VinFast Stock
Since the completion of a SPAC merger in August, VinFast stock has exhibited high volatility. The average daily movement has been around 11% up or down, although volatility has slightly decreased recently to an average of 4% per day over the past month.
Following the SPAC merger, VinFast stock was valued at $10 per share, equivalent to a market capitalization of approximately $23 billion. Notably, Lewis believes that this valuation remains fair. During a post-merger frenzy, the stock reached a high of $93, reflecting a valuation of more than $210 billion. Conversely, shares plummeted to as low as $4.59, valuing the company at less than $11 billion.
Analyst Coverage and Price Targets
Currently, four analysts cover VinFast stock, and all four rate it as a Buy. The average analyst price target is $10 per share, ranging from $7 to $12. Although this level of coverage is relatively low compared to some industry peers such as Rivian, which boasts coverage from 27 analysts, increased analyst attention is expected to help stabilize VinFast stock.
In conclusion, VinFast Auto stock shows promising potential for growth in the evolving electric vehicle market. Lewis’ optimistic outlook, combined with positive market reaction, highlights the company’s favorable prospects for investors.
