To The Moon

Stocks closed higher Friday as Wall Street recovered following a shaky start to the new year.The stock market enjoyed a broad rally led by the tech-heavy $.IXIC(.IXIC)$ . Still, the three major averages finished with losses for the week.

The best-performing concepts is Independent Power & Energy Traders.

Considering the different perceptions of the stock, this time TigerPicks chose $Vistra Energy Corp.(VST)$ to have a fundamental highlight to help users understand it better.

$Vistra Energy Corp.(VST)$

Vistra Corp. is an integrated retail and electric power generation company. The Company operates in six business segments: Retail, Texas, East, West, Sunset and Asset Closure. The Company operates in approximately 41,000 megawatts of installed generation capacity.

Vistra is one of the best-performing $.SPX(.SPX)$ companies, the price of its share soared 257.92% last year, and this year, it’s already up 17.76% in just one week! And VST stock returned 1,080% since it went public in 2016.

In The Right Place At The Right Time

Vistra may be known for being a nuclear power player.

However, it also has coal!

After closing the Energy Harbor deal, roughly a fifth of its power is generated by coal plants, making it the company's second-biggest power source behind natural gas. These assets are part of "Vistra Tradition."

As we can see below, Vistra now sees between $5.0 billion and $5.2 billion in adjusted EBITDA this year.

In 2025, Vistra expects adjusted EBITDA to range between $5.5 billion and $6.1 billion, with a midpoint of $5.8 billion, which is higher than its previous guidance of $5.7 billion. The year after that is expected to see close to $6.0 billion in EBITDA.

Shareholders Keep Winning

One of the things that sets Vistra apart - besides its nuclear power capabilities - is its capital allocation. Unlike almost every single major utility company, it is generating positive free cash flow.

As we can see below, utilities have a slightly negative buyback yield, as large corporations use equity funding in addition to debt funding.

Vistra is different, as it bought back $400 million worth of stock in the third quarter, using the temporary dip in its stock price to its advantage. In general, buybacks have been absolutely impressive.

Over the past three years, the company has bought back 27% of its shares, which makes it one of the most aggressive repurchasers across all S&P 500 sectors. During this period, it has maintained a very healthy balance sheet with a 3.0x leverage ratio. This, too, sets it apart in its sector.

Through 2026, the company expects to lower its leverage to 2.6x EBITDA, with a focus on buybacks, debt reduction, and disciplined M&A.

Valuation

Vistra Energy remains a buyable stock.

Currently, VST trades at a blended P/E ratio of 26.2x. While that may seem elevated, analysts expect 25% and 29% EPS growth in 2025 and 2026, respectively (FactSet). Even applying 18x multiple would give the stock a fair stock price target of almost $160, which is 14% above the current price and roughly $10 below the consensus forecast (FINVIZ).

Takeaway

Vistra continues to prove itself as a standout utility stock, as it combines nuclear power, strategic coal power, and a disciplined capital allocation strategy.

Its ability to generate robust free cash flow has fueled aggressive share buybacks, improving shareholder value while maintaining a healthy balance sheet.

Moreover, with soaring demand in key markets like ERCOT and PJM, supported by the AI and data center boom, Vistra is in a great spot for long-term growth.

Even better, despite its strong rally, the stock remains attractively valued.

While income-focused investors might wish for a higher dividend yield, Vistra's buyback strategy and growth trajectory make it one of my top picks in the utility sector.

Pros & Cons

Pros:

• Nuclear Power Advantage: As the cleanest and densest energy source, nuclear puts Vistra in a great spot in deregulated markets with growing power demand.

• Massive Share Buybacks: More than 27% of its shares were repurchased in three years at attractive prices, which improves the company's per-share value.

• Strong Demand Growth: AI, data center expansion, and re-shoring trends drive power demand in key markets like ERCOT and PJM.

• Healthy Financials: Robust free cash flow, low leverage, and improving guidance provide stability and growth potential.

Cons:

• Low Dividend Yield: At just 0.6%, it won't satisfy income-focused investors.

• Coal Exposure: While strategic, coal assets may face future regulatory or ESG-related challenges. However, I believe these risks are subdued.

• Valuation Concerns: A high P/E ratio requires faith in projected earnings growth. This risk is also subdued but still worth mentioning.

Stock Price Forecast:

Here are the target price forecasts for the next 12 months from analysts.

Based on 10 Wall Street analysts offering 12 month price targets for Vistra Energy in the last 3 months. The average price target is $156.00 with a high forecast of $231.00 and a low forecast of $103.00. The average price target represents a -3.92% change from the last price of $162.36.

Resource:

https://seekingalpha.com/article/4745889-power-play-why-vistra-is-my-favorite-utility-star

What are your thoughts on $Vistra Energy Corp.(VST)$ ?

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