Vistra Corp. Surges in Stock Performance Amid Growing Clean Energy Demand
Vistra Corp. (VST), which is headquartered in Irving, Texas, is a leading company in retail electricity and power generation. With a market capitalization of $55.3 billion, it operates a diverse array of power plants and is known for its innovative energy solutions, including renewable sources and battery storage. Focused on reliable, sustainable, and affordable energy, Vistra serves homes, businesses, and industries across the nation.
Strong Stock Gains Outpace the Market
Over the past year, Vistra’s stock has significantly outperformed the broader market. It achieved a remarkable gain of % during this timeframe, compared to the S&P 500 Index ($SPX), which rallied nearly 31.8%. In 2024, the stock soared by 301.1%, surpassing SPX’s 25.8% year-to-date increase.
Top Performance Compared to Utilities Sector
When compared to the Utilities Select Sector SPDR Fund (XLU), VST also showed stronger performance. The ETF gained 32% over the last year and achieved a return of 30.9% year-to-date.
Increased Demand Boosts Vistra’s Growth
Vistra’s strong price movement can be attributed to the rising demand for clean energy. This demand stems from developments in data centers, oil field electrification in the Permian Basin, and heightened needs from semiconductor and industrial customers. Additionally, Alphabet Inc. (GOOG) is investing in Texas data centers, which could provide further expansion opportunities.
Strategic Hedging and Licensing Moves
As of September 30, 2024, Vistra has hedged 100% of its power generation for 2024, 96% for 2025, and 64% for 2026, ensuring stability within its projections. The company is preparing over 70 sites for clean energy projects and has recently secured a 20-year license extension for its Comanche Peak nuclear plant.
Q3 Earnings Report Exceeds Expectations
On November 7, Vistra reported its Q3 earnings, resulting in an impressive stock jump of 7.8%. The company announced earnings of $5.25 per share, far exceeding the consensus estimate of $1.24 by 323.4% and up 320% from $1.25 in the same quarter of the previous year. Revenue hit $6.3 billion, marking a 53.8% increase from last year and surpassing analysts’ expectations by 26.7%.
Analysts’ Forecasts and Recommendations
For the current fiscal year ending in December, analysts anticipate VST’s earnings per share (EPS) to grow 24.8% to $4.48 on a diluted basis. However, Vistra’s earnings surprise history is mixed; it missed estimates in three of the last four quarters while outperforming expectations once.
The consensus rating among the 12 analysts monitoring VST stock is a “Strong Buy,” indicated by 11 “Strong Buy” ratings and one “Moderate Buy.”
Price Target Adjustments by Analysts
This outlook has shifted positively in the past two months, rising from nine “Strong Buy” recommendations. Recently, Morgan Stanley (MS) raised Vistra’s price target from $135 to $169, maintaining an “Overweight” rating. The firm adjusted targets for several utility stocks following the sector’s underperformance compared to the S&P 500 in October. Insights from the EEI Financial Conference raised concerns about regulatory and political risks in California, impacting data center growth.
Currently, the mean price target of $159.50 indicates a 3.2% premium over VST’s current price, while the highest target of $231 suggests a possible upside of 49.5%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
