Vistra Before Q3 Earnings: Should You Buy, Hold or Sell the Stock?

Earnings Performance - Vistra Corp (VST) is expected to report a 21.4% increase in third-quarter 2024 revenues to $4.96 billion, but a 0.8$1.24 [2] - The Zacks Consensus Estimate for VST's third-quarter earnings has been revised downward by 31.9% over the past 60 days [2] - VST has consistently missed earnings expectations in the last four quarters, with an average negative surprise of 83.33% [4][5] Financial Metrics and Valuation - VST's total debt to capital ratio stands at 68.5%, significantly higher than the industry average of 60.05% [9] - The company is trading at a forward 12-month P/E multiple of 21.11X, compared to the industry average of 15.95X [14] - VST shares have declined 7.1% in the last month, underperforming the industry's 0.1% decline [12] Operational Factors - VST's operating costs and SG&A expenses increased by 30% and 21.6%, respectively, in the first six months of 2024, potentially impacting third-quarter earnings [8] - The company is benefiting from increasing demand for clean electricity, particularly from U.S. data centers and Permian electrification [10] - VST's share repurchase program, aiming to buy back $2.25 billion worth of shares between 2024 and 2025, is expected to positively impact earnings per share [11] Strategic Initiatives - VST is expanding its generation capabilities through organic growth and acquisitions, including the Energy Harbor Corporation deal, which is expected to generate$150 million in annual synergies by 2026 [16] - The company is increasing its clean energy generation capacity to meet rising demand in its service area [18]