Vistra Energy is a utility company. It provides a full range of electricity services, including transmission, power generation, and distribution. The company has a niche in an essential industry. Despite the global coronavirus crisis, its revenues recovered quickly from a modest dip in the second quarter.
The stock’s third-quarter revenues reached $3.55 billion, increasing by 40% from the second quarter and 11% from the year-ago quarter. The earnings were substantial as well, at 90 cents per share. They showed the best results in over two years.
Furthermore, Vistra’s president and CFO, James Burke, and Board of Directors member Scott Helm has made recent insider stock buys. Burke bought 17,000 shares, paying over $310,000. Meanwhile, Helm purchased two blocs of 10,000 shares, paying over $356,000 for each.
BMO analyst James Thalacker rated Vistra as a Buy, setting a $29 price target for the shares. With this price target, the shareholders could gain 57% over the year.
Why does Thalacker think the stock will gain?
Thalacker noted that the company showed solid Q3 performance, and it has a strong potential to finish the year with more success.
He ascribed the strong performance at generation to a favourable hedging environment last summer. Furthermore, it was a very mild summer in ERCOT. So, Vistra Energy may have had the opportunity to optimize its generation portfolio. The company could manage that by running less of its own higher heart rate power units, while also procuring power in the spot market.
The analyst also stated that he maintains his $3.590 billion estimates as he waits to see how power conditions develop over the next few weeks.
Other analysts also think that Vistra Energy is a Strong Buy. The stock is trading at $18.47 per share, and its $29 average price target is set at $29. In case of success, the stock will gain 57% with this price target over the year.
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