Vistra Stock Upside Seen at 45% in Latest Upgrade Following Meta Deal

Vistra Corp's stock (NYSE: VST) has been given a boost by BMO Capital this morning, raising their price target on VST to $244.  Sentiment has been building even more bullish following a power purchase agreements with Meta Platforms, driving an upward revision in its stock valuation. Vistra added 10.47% during Friday's session, with bulls looking to kick off this new trading week in the green, with shares 0.44% higher in the pre-market.

The catalyst for this positive market reaction stems from Vistra's execution of 20-year power purchase agreements (PPAs) with Meta Platforms (NASDAQ: META). Under the terms of these agreements, Vistra will supply over 2,600 megawatts (MW) of zero-carbon energy from its nuclear plants located in Ohio and Pennsylvania.

This power will support Meta's data centers in the region, bolstering the tech giant's commitment to sustainability. Critically, the deal encompasses 2,176 MW from existing nuclear operations, further augmented by an additional 433 MW from planned capacity increases. This expansion represents the largest nuclear uprates supported by a corporate customer in the U.S., highlighting the scale and significance of the partnership.

Analysts have responded favorably to Vistra's strategic moves. BMO Capital, for instance, raised its price target on Vistra to $244 from a previous $230, maintaining an “Outperform” rating on the shares. This adjustment suggests an anticipated 45% upside from the current trading price.

BMO Capital's analysis emphasizes the importance of additionality of the new nuclear capacity and acknowledges the political support garnered from regional politicians, further solidifying the positive sentiment surrounding the deal. The firm’s positive outlook is directly linked to the enhanced financial stability and growth prospects afforded by the Meta agreements.

The implications of the partnership with Meta extend beyond immediate financial gains. By securing a substantial, long-term revenue stream, Vistra solidifies its position as a key player in providing sustainable energy solutions to major technology firms. This alignment with corporate sustainability goals and the increasing demand for clean energy in data center operations enhances Vistra's market position and attractiveness to investors who prioritize environmental, social, and governance (ESG) factors.