Vistra Energy (VST – Research Report), the Utilities sector company, was revisited by a Wall Street analyst today. Analyst Julien Dumoulin Smith from Bank of America Securities remains neutral on the stock and has a $44.00 price target.
Julien Dumoulin Smith has given a Buy rating to Vistra Energy’s stock due to a combination of factors. The company recently updated its 3rd Quarter 2023 financial guidance, increasing the projected EBITDA from ongoing operations by 6% to $3.95-4.10 billion. The Free Cash Flow before Growth (FCFbG) for the same period is also projected to increase by 14% to $2.35-2.50 billion. Furthermore, the company has initiated EBITDA guidance for FY24 and FY25, showing an increase in both projections. These financial updates do not include the effects of a pending nuclear acquisition, suggesting the actual figures could be even more robust.
In the second part of his analysis, Dumoulin Smith highlighted Vistra’s commitment to its shareholder-friendly capital allocation plan, which includes an aggressive share repurchase program. The company has repurchased $1 billion worth of shares as of November 2, 2023, and is expected to exhaust the full $4.25 billion repurchase authorization by the end of 2024. Additionally, Vistra reported strong 3rd Quarter results, with EBITDA from ongoing operations beating estimates. The company’s shares are viewed as attractively valued, with a ~25% levered free cash flow yield. Given the strong financial performance and commitment to shareholder value, Dumoulin Smith believes Vistra Energy is a good buy.
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Based on the recent corporate insider activity of 56 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of VST in relation to earlier this year.
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Vistra Energy (VST) Company Description:
Vistra Energy Corp. operates as an energy company, which engages in the provision of electricity and power generation. Its portfolio of businesses includes TXU Energy and Luminant. It operates through the following segments: Retail, ERCOT, PJM, NY/NE, MISO, Asset Closure, and Corporate and Other. The Retail segment sells electricity and related services to residential, commercial and industrial customers. The ERCOT, PJM, NY/NE, and MISO segments relate to electricity generation, wholesale energy sales and purchases, commodity risk management activities, and fuel production and logistics management. The Asset Closure segment involves in the decommissioning and reclamation of retired plants and mines. The Corporate and Other represents the remaining non-segment operations. The company was founded in 1882 and is headquartered in Irving, TX.
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