VinFast (NASDAQ:VFS): What’s Next After Wall Street Warms Up to the EV Maker?

Following a spectacular price correction since its market debut in August, shares of Vietnamese electric vehicle maker VinFast Auto (NASDAQ:VFS) rose nearly 12% yesterday and are up a further 6% in the early pre-market session today, as Wall Street begins warming up to the stock.

First, it was Cantor Fitzgerald’s Andres Sheppard who initiated coverage on VFS with a Buy rating and a $7 price target. Now, Wedbush’s Daniel Ives has started coverage on the stock with a Buy rating and an even higher $12 price target. This pegs the potential upside in the stock at just a little over 100% after it crashed from a high of nearly $82.3 in August to the present $6 level.

So, what gives? Sheppard expects VFS to benefit from its attractively priced vehicles and manufacturing base in Vietnam. The company has also been focusing on vertical integration and recently announced the acquisition of VinES to secure its supply of batteries.

Ives, too, is convinced about the company’s R&D strength and supply chain prowess. He expects VFS to churn out a robust EV portfolio given its manufacturing expertise. VFS recently inked a $1 billion share deal with Yorkville Advisors Global to fund its growth. It aims to set up a $2 billion facility in North Carolina and has plans for plants in India and Indonesia.

Moreover, VinFast intends to have a footprint in up to 50 markets globally by the end of next year and plans to distribute its EVs in the U.S. through 125 locations.

Still, in the current macro environment, inventories are rising at EV manufacturers in the U.S., according to the Wall Street Journal. Additionally, vehicle sales growth is tapering and the industry remains in the middle of a cutthroat price competition across major markets globally.

What Is the Price Prediction for VFS?

Amid these broader industry challenges, how VFS stock fares remains to be seen. Meanwhile, the Street has a Moderate Buy consensus rating on VinFast and the average VFS price target of $9.50 implies a 58.6% potential upside in the stock.

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