Vistra Energy (VST) Stock Forecast & Price Target

Vistra Corp. has experienced a 9% year-over-year increase in retail volumes, reaching 67 terawatt-hours, which reflects robust growth in its retail electricity segment. The company anticipates an improvement in its free cash flow conversion rate, targeting at or above 60% of adjusted EBITDA by 2026, indicating strong potential for future profitability. Additionally, the significant increase in its hedge percentage to 94% for 2026, coupled with expanded margins in its retail business due to effective hedging and commercial optimization strategies, positions Vistra favorably for capturing additional economic benefits from both retail and wholesale power markets.

Vistra Corp. faces a challenging outlook primarily due to the anticipated decline in its financial leverage ratio, which has remained around 3.0x in recent quarters but is expected to decrease significantly starting in 2026. The company's generation segment reported a year-over-year EBITDA decline of 5% to $593 million, primarily impacted by unplanned outages, while the retail segment also experienced a $33 million decrease in EBITDA to $756 million, attributed to rising supply costs. These financial pressures are compounded by a downside scenario that factors in depressed natural gas prices, poor operational performance, and the ongoing impacts of severe weather, all of which have negatively affected free cash flow per share.