Vistra’s stock tumbles despite bold EBITDA growth and buyback plans
Vistra Corp. (VST) has experienced a significant decline in its stock price, dropping by double digits to near its 100-day moving average of around $159. This pullback aligns with broader energy sector trends and follows concerns over AI-related valuation risks and debt levels in early November 2025. Despite this, the company has announced ambitious financial targets and aggressive shareholder returns.
The company's latest guidance indicates strong earnings growth ahead. For fiscal year 2026, VST expects adjusted EBITDA of $7.2 billion at the midpoint—a 24.1% year-over-year increase from its 2025 forecast. Looking further out, management has set a 2027 adjusted EBITDA target of $7.6 billion, marking a 5.5% rise from the prior year. This growth will be supported by the planned monetisation of the 1.2 GW Comanche Peak Nuclear Power Plant site, set to begin in the fourth quarter of 2027.
VST has also made progress in reducing its debt burden. The net debt to adjusted EBITDA ratio stood at 2.65x in the third fiscal quarter of 2025, with management aiming to lower it to around 2.3x by 2027. Meanwhile, profitability has improved, with year-to-date adjusted EBITDA margins reaching 31.7%—a 4-percentage-point increase from 2024 and a 3-point rise since 2019.
In response to the stock's decline, VST expanded its share buyback programme by $1 billion, bringing total remaining authorisation to about $2.2 billion. The company plans to use this by the end of 2027, adding to its existing repurchases—1.4% of its float over the last 12 months and 34.7% since 2019. Despite these efforts, the dividend yield remains low at 0.56%, well below its five-year average of 2.44% and the sector median of 3.44%.
Valuation multiples have adjusted downward following the correction. The forward EV/EBITDA ratio now sits at 12.55x, down from a recent peak of 14.98x and close to the one-year average of 12.19x. Analysts still see significant upside, with a fair value estimate of $214.60 and a long-term price target of $281.10, implying a potential gain of 73.6% from current levels.
VST's financial outlook remains robust, with clear targets for earnings growth and debt reduction. The expanded share repurchase programme signals confidence in its valuation, even as the stock trades below analyst estimates. With planned asset monetisation and improved margins, the company aims to strengthen its balance sheet while returning capital to shareholders.
