KEY POINTS
An analyst launched coverage of the Asian electric vehicle maker.
He did so with a solid buy recommendation.
VinFast Auto, one of the more volatile stocks in the volatile electric vehicle (EV) sector, was well in positive territory as Tuesday's trading session came to a close. The Vietnam-based company's share price increased by just under 12% on the day. The stock's upward move contrasted with the S&P 500 index's 0.2% dip.
VinFast initiated as a buy at Wedbush Securities
Wedbush Securities analyst Daniel Ives initiated coverage on VinFast stock that morning. He tagged it with an outperform (i.e., buy) recommendation at a price target of $12 per share -- more than double the stock's level at the start of the trading day.
The move came after a visit by Ives and his team to the EV maker's operations in its home country. Ives feels that VinFast has the potential to ramp up production quickly in its Vietnam facility. At the moment this has capacity to make 250,000 vehicles, a similar number of electric scooters, and 3,000 buses, according to the analyst. That should expand to a total of 950,000 vehicles as soon as 2026.
Ives added that VinFast's strong balance sheet, its cash equivalents, and an up to $1 billion standby equity agreement with financing company Yorkville Advisors give it a solid financial foundation.
The Vietnamese company is an up-and-comer to watch
We should never blindly invest purely on the basis of an analyst take. Yet Ives' evaluation of VinFast is striking, and he makes several valid and relevant points about the company's operations. This is a very determined business with plenty of muscle, and as such it'll surely be one to watch as the prominence of EVs continues to grow.
