Morgan Stanley Lowers Vistra (VST) Target While Staying Bullish on Long-Term Outlook

Vistra Corp. (NYSE:VST) is included among the 13 Most Promising Long-Term Stocks to Buy According to Hedge Funds.

On February 20, Morgan Stanley analyst David Arcaro lowered the price recommendation on Vistra Corp. (NYSE:VST) to $215 from $227. He maintained an Overweight rating on the shares. The analyst said the firm is updating its price targets across regulated and diversified utilities and independent power producers in North America. Morgan Stanley noted that utilities underperformed the S&P 500 this month. Looking ahead to Q4 earnings, the firm expects a more balanced discussion around data center demand. Arcaro said affordability concerns and political factors have started to influence how investors view data center pipeline growth.

A February 10 CNBC report highlighted a more positive view from Jefferies. The firm upgraded Vistra to a Buy rating, saying the current share price does not fully reflect its potential to secure future data center power supply agreements. Jefferies also raised its 12-month price target to $203 from $191, implying about 30% upside at the time. Following the upgrade, Vistra shares rose as much as 5.5% in early trading the next day.

The stock has faced pressure in recent months. Shares are down about 25% since Vistra announced last September that it would supply 1,200 megawatts of power from its Comanche Peak nuclear plant to an unnamed customer. Even with that decline, Jefferies believes the pullback has created a more attractive entry point, especially as demand for reliable nuclear power grows alongside data center expansion.

Analyst Julien Dumoulin-Smith said it is difficult to call the exact bottom. Still, he believes the stock has room to surprise on the upside. He noted that current valuations do not fully reflect the potential benefit from future data center contracts.

Vistra Corp. (NYSE:VST) is a Texas-based integrated retail electricity and power generation company. Founded in 1882, the company offers electricity and natural gas solutions to a range of customers, including residential, commercial, and industrial customers.

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