VST Stock is Trading Above 50 and 200-Day SMA: Buy, Hold or Sell?

Globe and Mail

a day ago

Vistra Corp. VST is trading above its 50-day and 200-day simple moving averages (SMAs), signaling a bullish trend.
Vistra's objective is to expand business through prudent investments in attractive retail, renewable, and energy storage assets while reducing its carbon footprint and creating a more sustainable company with enduring long-term value for its stakeholders.
VST's 50 and 200 Day SMA
The 50-day and 200-day SMAs are key indicators for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend of the stocks.
The company benefits from strong residential and business results in both the Texas and Midwest and Northeast markets. The high availability of its nuclear fleet allowed the company to benefit by catering to the increasing demand in its service territories.
Vistra has outperformed its Zacks Utility - Electric Power industry, the Zacks Utilities sector and the S&P 500 in the past year.
Price Performance (One Year)
Should you consider adding VST to your portfolio only based on positive price movements? Let's delve deeper and find out the factors that can help investors decide whether it is a good entry point to add VST stock to their portfolio.
Factors Contributing Toward VST Stock's Performance
Vistra is a diversified power producer with a robust footprint in competitive electricity markets across the United States. The company owns and operates six nuclear power units, totaling 6,448 megawatts (MW) of capacity, representing 16% of its total production. These zero-carbon assets provide dependable, low-cost electricity, generate stable cash flow, and offer a natural hedge against the commodity price volatility that impacts fossil-fuel-based generation.
Rising electricity demand across Vistra's core markets supports its long-term growth. Key demand drivers include the electrification of the oil and gas sector, particularly in the Permian Basin, expansion of LNG infrastructure, growth in AI-driven data centers, and the ongoing reshoring of industrial manufacturing to the United States. To meet this demand, Vistra has added 7,922 MW of zero-carbon generation since 2018 and continues to advance new clean energy projects.
Vistra's comprehensive hedging strategy underpins its financial and operational resilience. As of May 2, 2025, the company had hedged nearly 100% of its forecasted 2025 generation and about 90% for 2026. This forward-looking strategy enables Vistra to secure favorable pricing and mitigate earnings volatility tied to fluctuations in wholesale electricity markets.
Strategically aligned with the nation's clean energy goals, Vistra is accelerating the shift from aging fossil fuel assets to low-emission, long-duration generation. This transition not only reduces future compliance costs but also positions the company to capitalize on growth opportunities and federal incentives, including those under the Inflation Reduction Act.
Courtesy of the above initiative, the company generates ample funds, which can be utilized for shareholders' value creation. Vistra's aggressive share repurchase initiative is central to its long-term value creation strategy. Since November 2021, the company has repurchased shares worth $5.2 billion of its own shares through May 2, 2025, with $1.5 billion still authorized and expected to be executed by 2026.
VST Stock is Trading at a Premium
Vistra is currently trading at a premium valuation compared to its industry, with its forward 12-month price-to-earnings (P/E) ratio at 26.31X compared to the industry average of 14.53X.
Vistra is currently trading at a premium compared with another industry operator, Duke Energy Corporation DUK, which has a strong nuclear fleet. The current P/E- F12M ratio of DUK is 17.93X.
VST's Earnings Estimates
The Zacks Consensus Estimate for VST's 2025 earnings per share is showing a year-over-year decline, while 2026 earnings per share are showing improvement on a year-over-year basis.
The Zacks Consensus Estimate for Duke Energy's 2025 and 2026 earnings per share reflects a year-over-year growth of 7.12% and 6.1%, respectively.
VST Stock's ROE Higher Than its Industry
VST's trailing 12-month return on equity (ROE) is 87.33%, way ahead of its industry average of 10.41%. ROE, a profitability measure, reflects how effectively a company is utilizing its shareholders' funds in its operations to generate income.
Another company, Constellation Energy CEG, which has a large nuclear fleet, has an ROE of 21.93X, which is better than the industry average. Nearly 60% of Constellation Energy's total production volume comes from nuclear energy.
Vistra's Capital Return Program
Vistra continues to increase its shareholders' value through its share repurchase program and dividend payments.
VST's board of directors has also approved a quarterly dividend of 22.5 cents for the second quarter of 2025, reflecting a year-over-year increase of 3%. VST's management is targeting a dividend payment of $300 million annually. VST's management has raised dividends 15 times in the past five years. Check VST's dividend history here.
Constellation Energy also distributes dividends on a regular basis. The current annual dividend rate is $1.55 per share, and the company's management has raised its dividend four times in the past five years.
Wrapping Up
Vistra is well-positioned to benefit from the increasing demand for clean electricity across its service areas. Its robust hedging strategy enhances earnings visibility by protecting future generation volumes from price volatility. To meet this growing demand, the company is actively expanding its portfolio with new clean energy assets.
With VST shares currently trading at a premium, existing investors may be best served by holding their positions in this Zacks Rank #3 (Hold) stock to continue receiving dividend income, while monitoring for a more favorable entry point before making additional investments.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Constellation Energy Corporation (CEG): Free Stock Analysis Report
Duke Energy Corporation (DUK): Free Stock Analysis Report
Vistra Corp. (VST): Free Stock Analysis Report