Key Points
Vistra lost about 19% in two sessions after Texas elected a governor who campaigned on a moratorium on new data centers. On Friday, the stock jumped 10.6% to $124.80.
Third-quarter adjusted EBITDA rose more than 50% to $2.378 billion, ahead of the roughly $2.1 billion analysts expected, according to LSEG data.
Vistra issued its first 2027 outlook: adjusted EBITDA of $7.7 billion to $8.5 billion and adjusted free cash flow before growth of $4.3 billion to $5.1 billion.
The board added $1.5 billion to its buyback, leaving about $2.5 billion available. Vistra's share count is down about 30% since November 2021.
Vistra told investors that demand from hyperscalers has not shifted from Texas to other markets since the election, according to Reuters.
On Tuesday night, Texas elected Gina Hinojosa governor. She is the first Democrat to win the job since 1990, and she ran on a promise to issue a moratorium on new data centers and new data center approvals.
The market did the math in about two sessions.
Vistra, one of the largest power producers in Texas, fell 13.8% to $120.29 on Wednesday, a new 52-week low, and slid again on Thursday to $112.89. KeyBanc downgraded the stock along the way. From Tuesday's close, that was a loss of about 19%, on the theory that a pause on new data centers in Texas would choke off the demand story behind Vistra's entire rally.
Then on Friday morning, Vistra reported its quarter. The stock jumped 10.6%.
What the Numbers Actually Said
The quarter was not close.
Ongoing operations adjusted EBITDA, the profit measure Vistra and Wall Street both watch, rose more than 50% from a year earlier to $2.378 billion. Analysts were expecting about $2.1 billion. Net income came to $1.14 billion, up from $652 million a year ago.
Revenue was the one soft spot. Sales rose 28% to $6.35 billion, but that fell short of the roughly $6.79 billion analysts expected. Investors looked right past it, because Vistra's revenue line swings with power prices and hedges. Profit and cash flow are what pay for buybacks.
Then came the forecasts:
Vistra narrowed its 2026 adjusted EBITDA guidance to $7.1 billion to $7.5 billion, with a higher midpoint than its original range.
It introduced 2027 adjusted EBITDA guidance of $7.7 billion to $8.5 billion.
It expects 2027 adjusted free cash flow before growth of $4.3 billion to $5.1 billion.
That 2027 outlook includes the Cogentrix acquisition and a power purchase agreement for capacity at its Perry nuclear plant. It is a company telling investors its earnings are still headed higher next year, three days after an election that was supposed to have broken its story.
The Buyback Tells You What Management Thinks
Vistra's board authorized another $1.5 billion of share repurchases, leaving about $2.5 billion available, which the company expects to use by the end of 2028.
This is not a new habit. Vistra said it had about 339 million shares outstanding, roughly 30% fewer than in November 2021. When a company has been shrinking its share count that aggressively and adds more firepower right after its stock hit a 52-week low, it is sending a message about where it thinks the value is.
The Texas Question Isn't Settled
None of this means the political risk went away.
A Democratic governor in Texas, and Democrats who won elsewhere on similar promises, can still slow new data center construction. Investors are right to ask what that means for power demand in 2028 and beyond.
But two things from Friday's report push back on the panic.
First, Vistra said on its call that demand from hyperscalers and other large customers remains strong and has not shifted from Texas to PJM, the grid that covers much of the Mid-Atlantic and Midwest, according to Reuters.
Second, Vistra itself backed a pause on new Texas data center development back in August, pending an audit of the projects waiting in the state grid's interconnection queue, according to Utility Dive. Vistra executives have said for some time that those queues are overstated. A slowdown in speculative projects is not the same as a collapse in demand, and the company had been arguing that before the election.
As Dylan wrote this week in what the election means for your money, a Republican White House with a Democratic Congress has historically been followed by rising stocks, not falling ones. And our team flagged on election morning that elections change the rules, but they rarely change the customers. Vistra's quarter is a live test of that idea.
Not the Only Power Stock in Focus
Constellation Energy, the largest nuclear operator in the country, fell about 9% in the two sessions after the election, according to TIKR. On Friday it jumped 4.3% to $249.95.
Constellation reports before Monday's open. Analysts are looking for adjusted operating earnings of about $3.88 a share on roughly $9.2 billion of revenue. NRG Energy also reports Monday morning.
What Lands Next
Monday's power reports will show whether Vistra's message holds across the industry: steady demand, higher forecasts and more cash returned to shareholders.
Tuesday brings the October consumer price index, the last CPI report the Fed will see before its December 9 decision. Cisco reports Thursday after the close.
For now, the scorecard is simple. The election took about 19% off Vistra in two days. The company answered with more than 50% profit growth, a higher outlook and a bigger buyback. Next week will show which story the market believes.
This article is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.
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