Vistra Corp.’s VST top and bottom-line figures are expected to improve when it reports fourth-quarter 2024 results on Feb. 27, before market open.
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The Zacks Consensus Estimate for revenues is pegged at $4.38 billion, indicating an increase of 42.34% from the year-ago reported figure.
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The Zacks Consensus Estimate for earnings is pegged at $1.59 per share, indicating a whopping 431.25% increase from the year-ago reported figure.
What the Zacks Model Unveils
Our model does not conclusively predict a likely earnings beat for Vistra this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.
Vistra Corp. Price and EPS Surprise
Vistra Corp. price-eps-surprise | Vistra Corp. Quote
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Earnings ESP: Vistra has an Earnings ESP of 0.00%.
Zacks Rank: It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Utilities like Duke Energy Corporation DUK have nuclear power generation facilities. Its fourth-quarter earnings surpassed the Zacks Consensus Estimate by 3.11%.
The Zacks Consensus Estimate for 2025 earnings per share has moved down 0.15% in the past 60 days.
Factors Likely to Have Impacted VST’s Q4 Earnings
Vistra’s integrated business model provides it with a core competitive advantage and differentiates it from its non-integrated competitors by reducing the effects of commodity price movements and contributing to earnings and cash flow stability.
Let’s focus on the average estimates of certain key Vistra metrics that are commonly tracked and find out how these metrics have impacted the quarterly performance.
The Zacks Consensus Estimate for Adjusted EBITDA - Retail is currently pegged at $434.54 million, which suggests a year-over-year decline of 6.2%. The consensus estimate for Adjusted EBITDA- Texas is pinned at $302.06 million, which implies a year-over-year increase of 31.3%.
The consensus mark for Adjusted EBITDA - East is pinned at $638.38 million, which suggests a year-over-year increase of 251.6%. The aforesaid line of business is the largest contributor to VST’s operations and continued to be the same in the to-be-reported quarter.
Total retail electricity sales volume for the fourth quarter of 2024 is expected to be 32,603.43 Gwh, indicating a sequential decline of 18.6%.
Vistra utilizes a hedging program to reduce the impact of market changes and price fluctuations, and 100% of its 2024 generation volume is hedged. This extensive hedging has helped secure its fourth-quarter generation volumes.
Ongoing buyback of outstanding shares is likely to have had a positive impact on fourth-quarter earnings.
VST’s Shares Outperforms Its Industry
VST’s shares have gained 192.8% in the past year compared with the industry’s growth of 24%.
VST's Price Performance (One Year)
Image Source: Zacks Investment Research
VST Stock Trading at a Premium
Vistra is currently valued at a premium compared to its industry on a forward 12-month P/E basis. The company currently trades at 21.75X compared with its industry’s valuation of 14.58X.
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Other operators in the space, such as NextEra Energy NEE Dominion Energy D, are currently trading at a discount compared to Vistra. The P/E F12 multiple of DTE and AEE is 19.04X and 16.64X, respectively, at present.
Investment Thesis
Vistra is increasing its generation capabilities through organic and inorganic initiatives. The company’s integrated business model provides it with a core competitive advantage over its non-integrated competitors. The integration of Energy Harbor into VST’s existing operation will create synergies and boost the latter’s performance.
The operation of nuclear power generation facilities involves significant risks that could have a material adverse effect on VST’s revenues and operational results, and it may not have adequate insurance to cover these risks and hazards.
Wrapping Up
Vistra operates in a region where demand for clean electricity is rising. The company is increasing its clean energy generation capability through acquisition and organic means to serve customers and benefit from the same.
A stable hedging program and rising residential customer base add to VST’s benefits, given the positive factors investors consider when adding this Zacks Rank #2 stock to their portfolio.
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Vistra Corp. (VST) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
