Vistra Stock: EBITDA Up 30%, Price Down 28%

Vistra (NYSE: VST) reported second-quarter adjusted EBITDA of $1.767 billion, up more than 30% from $1.35 billion a year earlier. The stock, however, closed at $138.94 on Aug. 20, down 2.63%, and has fallen 28% over the past twelve months. The disconnect between operating performance and share price is the central tension in the name.

Management reaffirmed 2026 adjusted EBITDA guidance of $6.8 billion to $7.6 billion and adjusted free cash flow before growth of $3.925 billion to $4.725 billion. At the current market capitalisation of about $46.63 billion, the midpoint of that free cash flow range implies a yield of roughly 4.8%. Trailing free cash flow of $2.26 billion works out to a 4.84% yield on the $138.94 close.

Nineteen analysts cover VST with a Strong Buy consensus, according to stockanalysis.com. Their price targets span $106 to $313, with an average of $219.72. Recent revisions have leaned upward. Morgan Stanley's David Arcaro raised his target to $227 from $212 on Aug. 21. Exane BNP Paribas' Moses Sutton set $255 on Aug. 19. TD Cowen's Shelby Tucker published $221 on the same day, and DBS' Pei Hwa Ho $216 on Aug. 18. Bernstein sits at $181, still 29% above the current price.

The bear case centres on ERCOT forward prices. On the second-quarter call, management flagged that ERCOT forward prices have softened, offset by strength in PJM and the hedging programme. Vistra's merchant margin in Texas is the main earnings driver. A softer ERCOT curve compresses that margin. That is a cyclical negative, not a structural one, but it has pushed the stock down.

The bull case rests on contracted upside not yet in guidance. The AWS agreement at Comanche Peak covers roughly 3,800 MW of nuclear power. Meta agreements at PJM nuclear sites are advancing. Management said the Meta nuclear PPAs together with Cogentrix could add approximately $700 million to future guidance. That amount is not in the 2027 EBITDA midpoint of $7.4 billion to $7.8 billion.

Another item: Vistra committed up to $1 billion to Helix Digital Infrastructure, a data-centre partnership with KKR, NVIDIA and KIA. Vistra will serve as preferred power partner. That gives the company an equity stake in the compute build-out, not just a contracted supply relationship. At 13.57x forward earnings, the market assigns that option little value.

The stock trades at 13.57x forward earnings and 10.04x EV/EBITDA, with a trailing free cash flow yield of 4.84%. The comparison with peers shows the AI-power trade is no longer uniform. Cameco is up about 26% over twelve months. Constellation Energy (CEG) is roughly a third below its own high. Vistra's discount is a Texas merchant-pricing discount, not an AI-demand discount.

What decides the next move: the ERCOT forward curve and whether the Cogentrix and Meta nuclear agreements convert into the 2027 guidance number. Watch the next guidance update.