Goldman Sachs Upgrades Vistra Energy (VST) to Buy

Goldman Sachs analyst Carly Davenport upgraded Vistra Energy (NYSE: VST) from Neutral to Buy with a price target of $205.00 (from $200.00).

The analyst comments: "We upgrade VST from Neutral to Buy following the pullback in shares (-12% YTD, -35% from all-time-high), as we increase our estimates and see upside risk to consensus after incorporating the Meta PPA into our numbers. We see potential upside of 3-9% to our 2028 EBITDA if Vistra contracts the rest of its nuclear generation in a similar price range. In addition to the PPA upside potential, we see downside protection to the stock at these levels, as VST's current stock price of $142.5 implies average $49/MWh future power price on 2yr average multiple, lower than current forward average of ~$58/MWh, essentially implying limited upside around incremental PPAs or appreciation in power prices. Moreover, we believe valuation is near trough levels, with the stock trading at 8.1x 2027 EBITDA on our numbers following the pullback, driven by broader weakness in the power/AI trade, affordability concerns, and related risk around signing PPAs in an environment focused on BYOG, despite further M&A optionality and this year's Meta PPA. Finally, we remain constructive on the fundamentals of the existing business, with current volume hedging levels, retail operations and capacity revenues lowering volatility of the business. Our revised price target of $205 for VST implies 45% upside."

For an analyst ratings summary and ratings history on Vistra Energy click here. For more ratings news on Vistra Energy click here.

Shares of Vistra Energy closed at $143.07 yesterday.

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