Mizuho initiates Vistra Energy stock with Outperform rating

Mizuho initiated coverage on Vistra Energy (NYSE: VST) with an Outperform rating and set a price target of $169.00. The stock is currently trading at $136.21, just below its 52-week low of $132.66, after a 6.8% decrease over the last week. Mizuho sees Vistra as one of the top merchant power platforms poised to benefit from the projected surge in U.S. electricity demand, particularly in AI and data center industries.

The firm has been expanding its generation fleet, most recently acquiring Cogentrix, which added 5.5GW of generation capacity in ERCOT, PJM, and ISO-NE. Vistra is considered a key player in capitalizing on the AI and data center demand. Mizuho forecasts free cash flow yield to grow from around 8% in 2025 to about 13% by 2028, thanks to Vistra's strategic positioning capturing the latter stages of the forward curve.

The company is projected to have a 10% five-year compound annual growth rate in adjusted free cash flow. InvestingPro data suggests VST is currently undervalued, with a Fair Value estimate of $160.36. This makes VST an attractive entry point for value-seeking investors, as highlighted by InvestingPro. For those looking for undervalued stocks, VST is featured on InvestingPro's list of the most undervalued stocks, accompanied by a detailed Pro Research Report.

In a separate update, Vistra Corp reported Q2 2026 earnings, with adjusted earnings per share at $1.68 and revenue of $4.02 billion, missing expectations of $2.05 per share and $5.73 billion in revenue. However, the company reported a 30.8% increase in adjusted EBITDA from the prior year, attributed to improved performance in generation and retail segments.

Vistra reaffirmed its full-year guidance despite the shortfall. Meanwhile, Wells Fargo reduced its price target for Vistra Energy to $212 from $220, while keeping an Overweight rating. This reflects an acknowledgment of Vistra's solid Q2 earnings performance despite challenges in the ERCOT power markets. These developments illustrate Vistra's ongoing efforts to expand its high-margin sales across various sectors.