Vistra Corp. (VST) stock intrinsic value fair value estimate & owner earnings analysis

Vistra is a large US power producer and electricity retailer. It runs six nuclear units at four plants (Comanche Peak in Texas, Beaver Valley in Pennsylvania, Perry and Davis-Besse in Ohio), a large fleet of gas and coal plants, some solar and batteries, and a retail arm selling power to homes and businesses. Most of its earnings depend on wholesale power prices, which swing widely, and it carries a heavy debt load and preferred stock that must be paid before common shareholders. How we measured earnings. We start with cash from operations, then remove one-year swings in working capital (customer receivables, payables, inventories, collateral posted with counterparties, and the timing of derivative settlements), subtract stock compensation, subtract the bad-debt cost of retail customers, and subtract the spending needed just to keep the plants running, including nuclear fuel. For 2023 to 2025 we used the company's own figure for capital spending excluding growth projects ($1.47 billion, $1.73 billion and $2.10 billion). For earlier years we treated all capital spending as maintenance, which is conservative. Owner earnings per share came to $2.57 (2018), $3.80 (2019), $4.05 (2020), $0.24 (2021, the year of Winter Storm Uri), $2.82 (2022), $5.23 (2023), $6.10 (2024) and $8.84 (2025). Amounts paid to preferred holders ($192 million in 2025) are deducted in every case below because they come ahead of common shareholders. The starting level. Vistra was reshaped by the March 2024 purchase of Energy Harbor (nuclear plants in Ohio and Pennsylvania), so we use the middle year of 2023 to 2025, which is $6.10 per share in 2024, or about $5.67 per share after preferred dividends. We deliberately did not use 2025's $8.84, which was 45% above 2024 and is only a single full year with the combined fleet. As a cross-check, for 2025 net income plus non-cash charges less maintenance spending comes to $3.15 billion, within about 3% of our $3.06 billion, and the gap is explained by stock compensation, bad-debt cost and other operating items. Base case: about $80 per share. Earnings hold at about $5.67 per share for ten years, then fade 2% a year because nuclear operating licences run out from 2036 (Beaver Valley Unit 1), 2047 (Beaver Valley Unit 2), 2050 and 2053 (Comanche Peak) and Vistra's Texas coal plants (Martin Lake, Oak Grove and Coleto Creek) have no replacement earnings we can point to. No growth is credited. The 20-year power agreement with Amazon Web Services for 1,200 MW from Comanche Peak (deliveries from late 2027, full by 2032) and the 20-year agreements with Meta for 2,609 MW from its PJM-region nuclear plants (deliveries starting late 2026) are real and signed, but the prices are not disclosed, so we cannot put a number on the uplift and leave it out. We also left out the pending Cogentrix acquisition (about 5,500 MW of gas plants, expected at the time of the annual report to close in mid-to-late 2026), the Lotus gas plants, new solar and batteries, and share buybacks (6.6 million shares for about $1.0 billion in 2025), because none of these has a proven, priced payoff we can rely on. Bear case: about $44 per share. Earnings fall back to the middle of 2018 to 2023, about $1.6 billion a year before preferred dividends, or roughly $4.08 per share, for ten years, then fade 5% a year. We also charge one Winter Storm Uri-type loss in year three, sized at the roughly $2.2 billion pre-tax hit disclosed for 2021. In 2021 owner earnings were just $0.24 per share. The bear case also reflects the debt load and that operating problems can happen: a fire at Moss Landing in January 2025 led to a write-off of about $400 million and a fire at Martin Lake Unit 1 in November 2024 kept an 815 MW unit out until February 2026. Bull case: about $126 per share. Earnings hold at the level shown in 2025, about $8.28 per share after preferred dividends, for ten years, then fade 1% a year. That is what a full year of Energy Harbor plants produced in 2025, and the newly signed nuclear power agreements could help protect it. What would make this wrong. Power prices in Texas and the mid-Atlantic could fall for years, or another extreme weather event could hit. The Meta and Amazon contracts could turn out to be priced above what we assume, which would make even our base case too low. Debt and preferred stock leave common shareholders with less cushion than a typical business. Cogentrix, if completed, includes 5 million new Vistra shares as part of the payment. Margin-of-safety price. The margin-of-safety price is about $45, roughly 44% below our base value and about equal to our bear case. That wide margin reflects heavy debt, exposure to commodity prices and one Uri-type year in the eight years measured. Capital spending for 2018 and 2019 was restated in later filings, so we used the latest restated figures.