Vistra owns prized nuclear and gas plants, but $156.78 needs 9.6 times 2027 EBITDA with $23.5 billion debt. I initiate with a sell to $132, 16% below the price.
Key points
- $8.05 billion 2027 EBITDA is my base, using the $7.6 billion midpoint plus $0.45 billion from Cogentrix gas plants closing late 2026.
- $23.5 billion net debt after Cogentrix cash, assumed debt and $1.5 billion of 7% junior notes overwhelms operating progress.
- $1.30 billion yearly PJM capacity pay from 10,924 MW at $325 per MW-day is real cash, but hedged power and Texas softness cap upside.
The call
The market is too optimistic. At $156.78 a share, Vistra carries a $53.4 billion equity value and $77.4 billion enterprise value. That needs 9.6 times my $8.05 billion 2027 EBITDA, a full point above merchant peers.
Revenue swings while operating profit stays lumpySEC XBRL filings via desk fact table to Q2 2026.
I see slower conversion instead. GAAP free cash flow was only $0.65 billion in the last two quarters combined. Low cost debt is gone, new notes cost 7%, and uprate returns are undisclosed.
Valuation
| Driver | Figure |
|---|
| 2027 ongoing EBITDA | $8.05 billion |
| Enterprise multiple | 8.5 times |
| Enterprise value | $68.43 billion |
| Less pro forma net debt | $23.50 billion |
| Equity over 340.6M shares | $132.00 a share |
A merchant generator with retail earns 8 to 9 times EBITDA (a per share profit multiple for steady earnings). I pay 8.5 times for nuclear life and Meta and AWS contracts, but not 9.6 times with leverage at 2.9 times EBITDA. Downside to $132 is 16% plus a 0.6% dividend yield.
What Vistra is worth at different takeover multiplesAuthor's arithmetic on $8.05B 2027 EBITDA, $23.5B net debt, 340.6M shares, Oct 8 2026.
Risks
- Hyperscaler contracts accelerate with disclosed pricing above spot, which I would see in 2027 hedging above 94% and higher realized prices per MWh.
- ERCOT tightens faster as data centers connect, which I would see in higher Texas forward curves and dispatch at combined cycle plants.
- DOE loan closes cheap with long maturity and low equity, which I would see in definitive documents with rate and draw schedule.
What would change my mind
Signed cash returns on uprates plus debt falling toward $21 billion would make leverage and growth worth a higher multiple.