Export Expansion And Low Lifting Costs Will Drive Strong Long Term Upside

Catalysts

About Vista Energy. de

Vista Energy. de is an independent oil and gas producer focused on high productivity unconventional assets in Argentina’s Vaca Muerta formation.

What are the underlying business or industry changes driving this perspective?

• Acceleration of well tie ins in core blocks such as Bajada del Palo Oeste and La Amarga Chica, supported by regained financial flexibility, positions Vista to sustain double digit production growth and structurally increase revenue.
• Consistently low lifting costs near $4.4 per BOE and ongoing initiatives in contracts and technology to further reduce drilling and completion costs are set to expand netbacks and adjusted EBITDA margins.
• Rising export volumes sold at export parity, stronger Brent realization with minimal discounts, and growing access to premium markets like the U.S. West Coast should enhance realized prices and bolster top line growth.
• Integration of the Petronas Argentina and La Amarga Chica assets, combined with active knowledge sharing with YPF, is unlocking higher well productivity and scale benefits that support higher earnings and free cash flow over time.
• Secured long term funding, flexible service contracts, and a dollarized, increasingly export oriented business model reduce macro risk and enable Vista to prioritize profitable growth, driving higher and more resilient earnings.

Assumptions

This narrative explores a more optimistic perspective on Vista Energy. de compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts. How have these above catalysts been quantified?

• The bullish analysts are assuming Vista Energy. de's revenue will grow by 23.6% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 32.7% today to 24.1% in 3 years time.
• The bullish analysts expect earnings to reach $1.0 billion (and earnings per share of $1.16) by about December 2028, up from $727.1 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $546.2 million.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 17.4x on those 2028 earnings, up from 7.1x today. This future PE is greater than the current PE for the MX Oil and Gas industry at 7.1x.
• The bullish analysts expect the number of shares outstanding to grow by 6.22% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 14.49%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Vista’s growing dependence on export parity pricing and Brent linked benchmarks exposes it to sustained global oil price weakness. This would compress netback levels, reduce adjusted EBITDA and slow revenue growth even if production volumes continue to rise, ultimately weighing on earnings.
• The strategy to accelerate drilling and materially lift annual well tie ins raises structural capital intensity. Any slowdown in well productivity improvements or cost savings from contracts and technology would erode returns on invested capital and put pressure on free cash flow generation and net income.
• Higher leverage following the Petronas Argentina acquisition and new term loans, combined with a multi year plan for elevated CapEx to sustain production above 100,000 barrels per day, increases vulnerability to tighter credit conditions or country risk repricing. This could force cutbacks in growth investment and weaken earnings and cash flow.
• Rising political and macroeconomic risks in Argentina, including FX volatility, inflation and potential policy shifts after elections, may increase operating and drilling costs faster than anticipated or constrain export and infrastructure plans. This would reduce operating margins, adjusted EBITDA margins and long term earnings resilience.
• Ongoing appetite for mergers and acquisitions as a core strategic lever creates execution and integration risk over the long term. Overpaying for or underperforming new assets similar to La Amarga Chica would dilute value creation, pressure consolidated margins and limit growth in net income and free cash flow.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Vista Energy. de is MX$1689.54, which represents up to two standard deviations above the consensus price target of MX$1386.05. This valuation is based on what can be assumed as the expectations of Vista Energy. de's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of MX$1689.54, and the most bearish reporting a price target of just MX$1082.55.
  
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2028, revenues will be $4.2 billion, earnings will come to $1.0 billion, and it would be trading on a PE ratio of 17.4x, assuming you use a discount rate of 14.5%.
  
• Given the current share price of MX$896.54, the analyst price target of MX$1689.54 is 46.9% higher. Despite analysts expecting the underlying business to decline, they seem to believe it's more valuable than what the market thinks.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.