Wall Street Bulls Look Optimistic About Vistra (VST): Should You Buy?

Group 1: Brokerage Recommendations - Vistra Corp. (VST) has an average brokerage recommendation (ABR) of 1.17, indicating a consensus between Strong Buy and Buy based on 12 brokerage firms' recommendations [2] - Out of the 12 recommendations, 11 are Strong Buy, representing 91.7% of all recommendations [2] - Despite the positive ABR, relying solely on brokerage recommendations may not be advisable as studies show they often fail to guide investors effectively [4][9] Group 2: Limitations of Brokerage Recommendations - Brokerage analysts tend to exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [5][9] - The ABR is calculated solely from brokerage recommendations and may not reflect the actual price movement of stocks [8] - The ABR may not be up-to-date, while the Zacks Rank, which is based on earnings estimate revisions, provides a more timely indicator of future price movements [11] Group 3: Zacks Rank and Earnings Estimates - The Zacks Consensus Estimate for Vistra has increased by 4.3% over the past month to $7, indicating growing optimism among analysts regarding the company's earnings prospects [12] - The recent change in the consensus estimate, along with other factors, has resulted in a Zacks Rank 2 (Buy) for Vistra, suggesting a positive outlook for the stock [13] - The Zacks Rank is a reliable indicator of near-term price performance, driven by earnings estimate revisions, and should be used in conjunction with the ABR for investment decisions [7][10]