Irving, Texas-based Vistra Corp. (VST) operates as an integrated retail electricity and power generation company. With a market cap of $45.2 billion, the leader in the energy transformation and expansion is also involved in electricity generation, wholesale energy purchases and sales, commodity risk management, fuel production, and fuel logistics management activities.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and VST perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the utilities - independent power producers industry. Vistra's diverse energy mix, including nuclear, coal, natural gas, and solar power, along with its retail electricity business, has enhanced its market position. The acquisition of Energy Harbor has further strengthened Vistra's portfolio and expanded its nuclear and renewable energy capabilities. Investments in utility-scale battery projects demonstrate Vistra's commitment to innovation and leadership in energy storage solutions.
Despite its notable strength, VST slipped 18.7% from its 52-week high of $168.67, achieved on Nov. 22. Over the past three months, VST stock has gained 47.9%, considerably outperforming the Utilities Select Sector SPDR Fund’s (XLU)3.6% losses during the same time frame.
In the longer term, shares of VST rose 256.2% on a YTD basis and climbed 263.7% over the past 52 weeks, significantly outperforming XLU’s YTD gains of 18.8% and 18.3% returns over the last year.
To confirm the bullish trend, VST has been trading above its 200-day moving average over the past year. However, it is trading below its 50-day moving average recently.
Vistra's outperformance is due to the increasing demand for clean electricity in its service area. The company's ability to generate emission-free electricity from various sources, including solar, natural gas, and nuclear, has been key to its success. Additionally, the development of large data centers and electrification in the Permian Basin region has boosted demand for Vistra's services. The company's strategic acquisitions, such as Energy Harbor Corp., have also contributed to its growth by expanding its generation capabilities and geographical reach.
On Nov. 7, VST shares closed up more than 7% after reporting its Q3 results. Its revenue stood at $6.3 billion, up 53.9% year over year. The company’s full-year adjusted EBITDA is expected to be between $4.9 billion and $5.1 billion.
VST’s rival, Talen Energy Corporation (TLN) shares lagged behind the stock, with a 206.1% uptick on a YTD basis and solid 216% gains over the past 52 weeks.
Wall Street analysts are bullish on VST’s prospects. The stock has a consensus “Strong Buy” rating from the 12 analysts covering it, and the mean price target of $166.08 suggests a potential upside of 21% from current price levels.
