Workflow
Vistra Outperforms Industry in 12 Months: Time to Buy the Stock?
VSTVistra(VST) ZACKS·2025-02-28 15:55

Core Viewpoint - Vistra Corp. (VST) has experienced a significant stock price increase of 138.4% over the past 12 months, outperforming the Zacks Utility-Electric Power industry and the broader market, driven by strong retail and commercial operations [1] Group 1: Financial Performance - The ongoing net income of Vistra was nearly 2.93billionin2024,reflectingayear−over−yearincreaseof95.52.93 billion in 2024, reflecting a year-over-year increase of 95.5% [3] - The Zacks Consensus Estimate for Vistra's 2025 sales indicates a year-over-year growth of 19.75% [11] - Sales estimates for the current quarter (12/2024) are projected at 4.61 billion, with a year-over-year growth estimate of 49.70% [12] Group 2: Market Demand and Operations - Vistra benefits from strong residential and business results in Texas, Midwest, and Northeast markets, with over 95% commercial availability of its generation assets in Q4 [2][20] - The company is experiencing increased demand for clean electricity, driven by the development of large load data centers and electrification of oil field operations, particularly in the Permian Basin [5] - Major tech companies are expected to invest nearly 1trillionindatacentersoverthenextfiveyears,positioningVistratobenefitfromthisrisingdemandforcleanenergy[8]Group3:StrategicInitiatives−Vistrahasacomprehensivehedgingprogram,havinghedged1001 trillion in data centers over the next five years, positioning Vistra to benefit from this rising demand for clean energy [8] Group 3: Strategic Initiatives - Vistra has a comprehensive hedging program, having hedged 100% of expected production for 2025 and 80% for 2026, providing increased visibility of long-term earnings [6] - The company is expanding its clean energy generation capacity through both organic and inorganic means, with over 70 sites available for future clean energy projects [7][20] Group 4: Shareholder Value - Vistra has returned value to shareholders through a share repurchase program, buying back over 4.9 billion in shares since November 2021, with plans to repurchase an additional 1.9billionbytheendof2026[15]−Theboardhasapprovedaquarterlydividendof22.35centsforQ12025,targetinganannualdividendpaymentof1.9 billion by the end of 2026 [15] - The board has approved a quarterly dividend of 22.35 cents for Q1 2025, targeting an annual dividend payment of 300 million, having raised dividends 15 times in the past five years [16] Group 5: Valuation - Vistra is currently trading at a premium valuation, with a forward 12-month price-to-earnings (P/E) ratio of 19.77X, compared to the industry average of 14.4X [17] - The P/E ratio is also higher than that of Duke Energy Corporation (DUK), which stands at 18.12X [19]