Jefferies' Bullish Rating on Vistra (VST) Bolstered by Multiple Growth Drivers

On May 16, Julien Dumoulin Smith from Jefferies commended Vistra Corp.’s (NYSE:VST) recent strategic decisions, underpinning his Buy rating on the shares. The analyst believes the company’s efforts to purchase the eastern portfolio of natural gas plants could be substantially positive because these assets would significantly raise its operational capacity. He also believes that the company’s recent manoeuvre to increase its financial flexibility and strengthen its balance sheet appears to hint towards its preparedness for further acquisitions and is thus positive for future growth. The analyst added that the new nuclear production tax credit (PTC) under the Inflation Reduction Act (IRA) provides another advantage, as they are positive for credit ratings and increases the company’s leverage capacity.

To put things in perspective, on May 15, Vistra Corp. (NYSE:VST) announced its agreement with Lotus Infrastructure Partners to acquire seven natural gas generation facilities totalling around 2,600 MW of capacity. Vistra expects to pay around $1.9 billion for the assets, equating to approximately $743/kW. The transaction is expected to close by late 2025 or early 2026.

The company is an integrated retail electricity and power generation company. It operates a power generation fleet of natural gas, nuclear, coal, solar, and battery energy storage facilities.

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