Vistra: The Market Is Pricing The Power Shortage, But Not The Contracted Earnings Upgrade

Vistra is evolving from a cyclical merchant generator to a diversified, contract-driven energy platform with improved earnings visibility. Long-term nuclear contracts with AWS and Meta, plus the Cogentrix acquisition, are expected to drive nearly half of VST's EBITDA and support capital investment. My base case targets $8.1B adjusted EBITDA and a 10.5% FCFbG yield, implying a value of ~$180/share and supporting a Buy rating. Risks include delayed load growth, operational execution, and valuation compression if earnings or contracted cash flows underperform expectations.

Vistra Corp.'s ( VST ) premise of increasing electricity demand is less novel now than it was previously. This is well known and has positively affected valuations.