Vistra Energy (VST) Jan 2026 Valuation Model and Risk Framework
Vistra (VST) Jan 2026 Valuation Model and Risk Framework
This Vistra (Vistra) valuation model includes EV/EBITDA and free cash flow based price targets, segment breakdown of power plants, detailed operating model, historical financials, and estimated projections. Assumptions can easily be adjusted by the user.
This is one of the cheapest U.S. large cap power producers that could potentially benefit from higher power demand from AI data centers.
Recent Acquisition: After the market close on 1/5, Vistra (VST) announced the acquisition of Cogentrix, which includes 5.5 GW of natural gas generation, for a net purchase price of ~$4 bn or ~$730/kW. The company expects the transaction to close in mid-to-late 2026. The acquisition implies a 7.25x adjusted 2027 EBITDA multiple per VST and is equivalent to ~13% of its current fleet of ~44 GW. The proposed acquisition includes 10 natural gas generation facilities across PJM, ISO-NE, and ERCOT. The company expects the transaction to deliver mid-single-digit accretion to adjusted free cash flow before growth in 2027 and high-single-digit accretion over 2027-2029. VST reiterated its capex plan, including its long-term net leverage target of less than 3x, its capital returns to shareholders, and its share repurchase plans.
Business Overview: Vistra Energy (VST) is widely considered one of the most powerful "proxy trades" for AI. While Nvidia provides the chips, Vistra provides the massive, 24/7 electricity required to run them.
Vistra is unique because it offers a "dual-engine" power strategy: Nuclear for carbon-free branding and Natural Gas for immediate, reliable scale.
Nuclear: Tech giants like Microsoft, Amazon, and Google have strict net-zero carbon goals. This makes nuclear energy the "Gold Standard" for AI data centers.
The Energy Harbor Acquisition: In 2024, Vistra acquired Energy Harbor, making it the second-largest non-regulated nuclear fleet in the U.S. (behind Constellation Energy).
20-Year Contracts: In late 2025, Vistra signed a landmark 20-year Power Purchase Agreement (PPA) for 1,200 MW of carbon-free nuclear power with a major hyperscaler, securing predictable, high-margin cash flows for decades.
Gas: The "Cogentrix" Gas Expansion (Jan 2026)
Just this week (January 5, 2026), Vistra doubled down on its data center strategy by announcing a $4 billion acquisition of Cogentrix Energy.
Why Gas Matters for AI: While nuclear is great, building new reactors takes a decade. AI demand is happening now. Natural gas can be deployed quickly and is "dispatchable," meaning it can ramp up instantly to fill gaps in the grid.
New Capacity: This deal adds 5,500 MW of modern natural gas generation across key "data center hubs" like Pennsylvania and New England.
Vistra is being "re-rated" by Wall Street from a boring utility stock into a high-growth tech infrastructure play.
Core Earnings Surge: For 2026, Vistra has projected an Adjusted EBITDA of $6.8 billion – $7.6 billion, a significant jump from 2025.
Investment Grade Status: In late 2025, S&P Global upgraded Vistra to Investment Grade (BBB-). This lower cost of debt is critical because it allows Vistra to fund multi-billion dollar acquisitions (like Cogentrix) while continuing to buy back shares.
Hedge Visibility: Vistra has already hedged 96% of its 2026 generation, meaning its revenue is largely "locked in," protecting investors from fluctuations in natural gas prices.
Vistra is the "pragmatic" AI play. By owning both the green energy tech companies want (Nuclear) and the reliable energy the grid needs (Gas), they have captured the entire value chain. We will continue to track this name for you...
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