Vistra is the IBD Stock Of The Day for Monday. The energy company and S&P 500 leader broke out to record highs following its earnings results earlier this month. Vistra rose Monday.
Irving, Texas-based Vistra is an energy supplier specializing in natural gas, coal and battery-storage facilities. The Fortune 500 company has expanded operations via additions of nuclear and solar facilities. These capitalize on booming energy demand to fulfill the enormous requirements needed for artificial intelligence.
Artificial intelligence and the data centers needed to train the systems are expected to boost energy demand throughout this decade. In the U.S., McKinsey & Co. projects that data center energy demand will grow from around 4% currently, as percentage of total energy demand, to 11%-12% by 2030.
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In August, Vistra announced it secured power purchase agreements from Amazon and Microsoft for its new solar facilities. The company is building out a 200 MW site for Amazon in Texas and a 400 MW Illinois facility in a deal with Microsoft. Vistra also said it plans to develop up to 2,000 MW of gas-fueled electrical capacity in its home state of Texas to enhance grid reliability.
Results Fuel Vistra Rally
Meanwhile, VST stock rallied in early November on the back of its Q3 beat. Vistra saw earnings growth accelerate for the second quarter in a row, growing at a 322% clip, according to the company's 10-Q filing. Revenue leapt 54% to nearly $6.3 billion, while FactSet analysts expected just over $5 billion.
Executives also noted that Vistra is "in discussions with two particular large companies about building new gas plants to support a data center project."
In addition, Vistra raised its 2024 ongoing operations adjusted EBITDA target to $5 billion-$5.2 billion from $4.55 billion-$5.05 billion. The company initiated 2025 guidance, expecting adjusted EBITDA of $5.5 billion-$6.1 billion. Analysts put 2025 EBITDA at $5.76 billion.
Along with its 2025 guidance, the Vistra board authorized an additional $1 billion of share repurchases. That brings the current share repurchase authorization to around $2.2 billion. It is expected to be utilized by the end of 2026.
Breaks Out To Fresh High
VST stock surged 4.3% Monday to break out to record highs, peaking at 152.64 in early trade.
Shares cleared a 149.80 buy point for a short double-bottom base with a high handle.
Investors could have used Thursday's high of 143.41 as an early entry opportunity.
SwingTrader added VST stock on Monday as a half position with a 149.53 entry, with the current buy zone ranging from 149.08 to 152.06.
Vistra also leads the Utility-Electric Power Group, according to IBD Stock Checkup.
Vistra has a near-perfect 97 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. The stock's relative strength line has rebounded to 52-week highs, and it has a perfect 99 RS Rating. However, the company's string of quarterly losses leading up to its Q3 results have landed it a 48 EPS Rating.
VST stock vaulted more than 291% so far this year, making it the top performer in the S&P 500.
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