Vistra Energy stock target cut to $151 at Jefferies

On Thursday, Jefferies analysts revised their price target for Vistra Energy (NYSE:VST), lowering it to $151.00 from the previous figure of $167.00. Despite the reduction, they have maintained a ’Buy’ rating on the company’s shares. Currently trading at $124.01, InvestingPro analysis indicates the stock is undervalued, with the company showing impressive financial health metrics and a "GREAT" overall score of 3.16. The analysts noted that they still find value in Vistra Energy, referencing the year-end 2024 results and mark-to-market adjustments for commodities. They highlighted that their forecast for fiscal year 2027 EBITDA stands at $7.6 billion, which is above the consensus of $6.9 billion on the Street, building upon the company’s current EBITDA of $6.77 billion.

The analysts commented on the potential for a data center deal, which has not yet been announced. They pointed out that the recent sell-off from the stock’s highs presents an opportunity for investors, as the current valuation does not fully price in the data center possibility. With a PEG ratio of just 0.18, suggesting attractive valuation relative to growth, and strong free cash flows of $2.49 billion over the last twelve months, Vistra’s projected EBITDA for 2027 could provide a buffer against downside risks.

Furthermore, Jefferies analysts provided an upside case for Vistra Energy, suggesting that if the data center scenario is fully realized, there could be a 61% upside to $214. In contrast, if data centers are excluded from the equation, the upside is seen as a modest 3% to $130. This assessment underscores what Jefferies views as an attractive risk/reward skew for investors considering Vistra Energy shares.

The maintenance of the ’Buy’ rating by Jefferies analysts indicates their positive outlook on Vistra Energy’s stock, despite the adjustment in the price target. The analysts’ comments suggest they believe Vistra Energy has solid fundamentals that could support its stock price in the future, especially if the company successfully capitalizes on data center opportunities.

In other recent news, Vistra Energy reported robust fourth-quarter 2024 earnings, significantly exceeding analyst expectations with an earnings per share of $2.38, compared to the forecasted $1.39. The company’s revenue also surpassed projections, reaching $17.22 billion against the anticipated $3.72 billion. Despite these strong financial results, Fitch Ratings revised Vistra Holdings Limited’s outlook from Stable to Negative, while affirming the Long-Term Foreign-Currency Issuer Default Rating at ’B+’. This revision was attributed to a slower-than-expected deleveraging pace and increased net debt due to acquisitions.

Additionally, BofA Securities upgraded Vistra Energy’s stock from Neutral to Buy, though they lowered the price target to $152 from $164. The upgrade reflects confidence in Vistra’s core operations and potential benefits from tightening energy markets in specific regions. BofA highlighted potential regulatory developments that could positively impact Vistra, particularly in advancing datacenter deals. Meanwhile, Fitch expects Vistra’s EBITDA net leverage to remain above 6.0x in 2025, with improvements anticipated by 2026 due to cost synergies. These developments underscore a complex landscape for Vistra, balancing strong financial performance with challenges in debt management and regulatory clarity.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.