Vistra (VST): Revisiting Valuation After S&P Upgrade and Record-Priced PJM Capacity Win

Vistra (VST) just checked two big boxes for long term investors: S&P lifted its credit rating to investment grade, and the company locked in record priced capacity in PJM, boosting multi year cash flow visibility.

See our latest analysis for Vistra.

Despite a choppy few months, with a 90 day share price return of minus 22.84 percent as AI power trades cooled and insider selling grabbed headlines, Vistra still sits at 163.03 dollars and has a 5 year total shareholder return of 867.53 percent. This indicates that long term momentum remains firmly intact.

If Vistra's story has you rethinking the balance of growth and risk, this could be a good moment to discover fast growing stocks with high insider ownership.

With shares still well below consensus targets and cash flows better anchored after PJM and the S&P upgrade, is Vistra quietly trading at a discount, or already fully pricing in the next leg of AI driven power growth?

Most Popular Narrative Narrative: 29.3% Undervalued

With Vistra closing at 163.03 dollars versus a narrative fair value of 230.71 dollars, the gap points to a sizable upside if the thesis plays out.

Commitment to disciplined capital allocation, including ongoing share repurchases, dividend increases, and material deleveraging, is expected to drive higher per share earnings, elevate free cash flow, and improve the company's risk profile, supporting greater shareholder value over time.

Read the complete narrative.

Curious how steady power demand, richer margins, and shrinking share count combine into that valuation gap? The full narrative unpacks the growth math behind this call.

Result: Fair Value of $230.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, elevated leverage and heavy dependence on fossil assets mean that tighter credit or faster decarbonization could quickly compress margins and derail that upside case.

Find out about the key risks to this Vistra narrative.

Another Angle on Valuation

Fair value models say Vistra is 60 percent below where it should trade, but its 57.5 times earnings ratio looks stretched compared with a 30.1 times peer average and a 47.7 times fair ratio. Is the market overpaying for growth, or is the model missing the cycle?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Vistra Narrative

If you see the story playing out differently, or simply want to test your own assumptions against the numbers, you can build a custom view in just a few minutes, Do it your way.

A great starting point for your Vistra research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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