Vistra (VST) -2.7% in Tuesday’s trading, despite KeyBanc starting coverage of the company with an Overweight rating and $217 price target, underpinned by the bank’s bullish stance on U.S. power markets, with Vistra being one of the largest incumbent independent power providers.
KeyBanc’s Sophie Karp also likes Vistra’s (VST) diversified portfolio of assets positioned in key markets, its retail exposure, strong balance sheet, and free cash flow generation, which provide resilience and growth optionality in a tightening U.S. power market.
The U.S. power market is entering a structural supercycle of growing demand, driven by AI-powered data centers, industrial reshoring, and electrification, and Karp said Vistra (VST) is well-positioned to capitalize on this demand surge through its dispatchable generation assets and its strategic partnerships with hyperscalers such as Amazon and Microsoft, adding that a favorable policy support for reliability and energy security further reinforces the value of the company’s portfolio.
Vistra (VST) maintains a net leverage ratio of ~2.6x and has returned over $6.7 billion to shareholders since 2021, and with 2024 free cash flow of $2.5 billion and 2025 guidance of $3.0 billion-$3.5 billion, the analyst sees the company as well-positioned to fund growth while maintaining financial flexibility.