IRVING, Texas, August 29, 2026, 15:01 (ET) – Vistra (VST) stock dropped 2% after the company reported a $472 million loss on hedging, which overshadowed a 31% increase in EBITDA.
- Vistra stock ended Friday trading at $137.09, falling 1.95%.
- Adjusted EBITDA for the second quarter increased by 31% to $1.77 billion.
- Reported earnings were impacted by an unrealized hedge loss of $472 million.
- The consensus price target of $217.42 from analysts suggests a potential upside of 58.6%.
Vistra Corp. (NYSE: VST) declined 1.95% on Friday, wiping out roughly $935 million in market capitalization. The stock finished at $137.09, marking its second straight drop. Trading volume reached 3.0 million shares, lower than the 50-day average of 4.4 million Friday close.
The main concern is the quality of earnings. Vistra’s core business grew rapidly, but hedge accounting caused GAAP profit to decline.
Adjusted EBITDA from ongoing operations rose 31% in the second quarter, reaching $1.77 billion. GAAP net income decreased 6.7% to $305 million, following an unrealized hedge loss of $472 million Reuters.
| Q2 adjusted EBITDA | 2026 | 2025 | Change |
|---|---|---|---|
| Texas | $311 million | $142 million | up 119% |
| East | $642 million | $418 million | up 54% |
| Retail | $773 million | $756 million | up 2% |
| Total ongoing operations | $1.77 billion | $1.35 billion | up 31% |
Most of the growth came from Texas and East, supported by increased realized energy and capacity prices, as well as the addition of three months of earnings from acquired Lotus plants company results.
Management maintained its 2026 adjusted EBITDA forecast at $6.8 billion to $7.6 billion. The outlook for adjusted free-cash-flow-before-growth stays at a range of $3.93 billion to $4.73 billion.
The midpoint represents about 9.2% of Vistra’s $47 billion market capitalization. This is a non-GAAP metric and omits growth expenditures, meaning it does not reflect standard free cash flow.
Hedging offers short-term clarity. As of August 3, Vistra had secured almost all of its projected 2026 output, 94% for 2027, and 72% for 2028.
Since November 2021, the company has bought back approximately $6.5 billion in shares. The number of outstanding shares dropped by roughly 30%, with $1.2 billion of buyback authorization still available.
Analysts are upbeat but highly split. Of the group, 20 maintain a Buy consensus and the average price target stands at $217.42, but projections range widely from $106 to $305 analyst consensus.
Recent calls reflect that uncertainty. President Capital lowered its target to $167 from $222, while Morgan Stanley lifted its target to $227.
Vistra pledged as much as $1 billion to Helix Digital Infrastructure, with the possibility of an additional $500 million if the AI venture achieves certain milestones.
Risks: Settlements from hedges may offset reported accounting profits or losses. Increased interest costs, fluctuations in power prices, Cogentrix integration, and Helix funding might limit cash for share repurchases.
The upcoming focus is on conversion. Investors require adjusted growth to translate into sustainable GAAP earnings and distributable cash, rather than resulting in another mark-to-market fluctuation.
