Why This Nuclear Win Could Be Bigger Than It Looks

Portfolio Activity -

The big headline: Vistra (VST) got approval to run its 1,268 MW Perry Nuclear Plant through 2046—another 20 years of clean baseload power. Feels like a quiet win for reliable energy, but the stock barely noticed, slipping just 0.1%.

The more subtle story lies in the metrics:

  • Market cap around $65 billion, with a TTM P/E near 30–35× — well above its 5-year historical average (~20×).
  • Forward P/E ~22×, and PEG ~2.9×, suggesting high expectations for future growth .
  • Revenue up ~49% YoY— driven by acquisitions and robust utility demand.
  • Profit margins are strong—net margin ~12% and ROE ~42%, showing solid profitability.
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Debt is hefty—D/E around 3.7×—but coverage ratios (~3.9× interest coverage) mean it's manageable. And despite that, free cash flow is nearly $2.5 billion with an ongoing $5 billion buyback plan, adding to shareholder returns.

📌 What to watch next

  • Whether markets finally start pushing nuclear/utility valuations higher after licensing delays
  • If VST’s elevated multiples get justified by continued growth, M&A, or FCF strength
  • Bond market sensitivity to VST’s debt level, versus the credibility of cash flows
  • Signals from peer metrics and sector rotation trends