Vistra Energy (VST) Stock Forecast & Price Target

Vistra Corp. has demonstrated significant growth, with retail volumes increasing 9% year-over-year to 67 terawatt-hours, supported by an expanded customer base serving 5 million customers across 20 states. The company's recent acquisition of Cogentrix is expected to enhance its earnings before interest, taxes, depreciation, and amortization (EBITDA) by approximately 7%, while the projected free cash flow conversion rate is anticipated to improve to at least 60% of adjusted EBITDA by 2026. Additionally, Vistra's improved hedge percentage to 94% for 2026, alongside expanded margins in its retail business, highlights its effective risk management strategy and positions the company favorably in a dynamic energy market.

Vistra Corp. has experienced a year-over-year decline in EBITDA within its generation segment, reflecting operational challenges such as unplanned outages, which contributed to a 5% drop and indicate potential instability in performance. Additionally, the retail segment's EBITDA also faced pressures from fluctuating supply costs, despite maintaining customer counts and margins, suggesting vulnerabilities in operational efficiency and market conditions. The negative outlook is further compounded by the expectation of a decline in the leverage ratio beginning in 2026, associated with potential lower gas prices and adverse weather conditions affecting free cash flow, which raises concerns about Vistra’s financial resilience moving forward.