Key Takeaways
- Vistra stock fell 10% today after Democrats won Congress and Texas, pulling Constellation Energy, GE Vernova and Vertiv down too.
- Texas Governor-elect Gina Hinojosa campaigned on a moratorium on new data centers.
- Vistra had hedged about 94% of its expected 2027 generation as of early August, so the drop looks overdone.
- Vistra’s third-quarter report on Thursday is the next test.
Vistra (VST) stock sank 10% this morning after Democrats won both houses of Congress, and Gina Hinojosa won the Texas governor’s race promising to halt new data centers.
The AI power trade fell with it: Constellation Energy (CEG) is down 6%, and GE Vernova (GEV) and Vertiv (VRT) each dropped 9%.
Texas is the worry
Altimeter Capital’s Brad Gerstner put it on the Fireside podcast Tuesday:
“The big fear is that in a blue tsunami, particularly in the state of Texas, you have Hinojosa, who will issue a moratorium on new data centers, may make it difficult for the existing data centers to get permitted.”
Wells Fargo estimates 27% of planned US data center gigawatts are in Texas.
Vistra’s next two years are mostly locked in
Going into the election, analysts expected Vistra’s normalized EPS to nearly double this year and keep climbing through 2028.
With 2026 almost over and about 94% of 2027’s expected generation hedged as of Aug. 3, I don’t see the election moving those years much. A Texas slowdown would hit 2028 first, when only about 72% was hedged.
And the stock was cheap going in: 13x forward earnings at Tuesday’s close, below its five-year average of 15x.
At today’s price, it’s about 12x.
TIKR tracks 23 analysts on Vistra. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Vistra, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Vistra’s Analyst Ratings
Constellation and the suppliers face the same question
Constellation was below its own history too: 21x forward earnings at Tuesday’s close against a three-year average of 26x. It reports Monday, Nov. 9, and a delayed data center contract would matter more than the quarter.
The suppliers haven’t seen orders slow. GE Vernova’s third-quarter orders rose 96% organically, and Vertiv’s organic orders more than doubled. But Schwab strategist Liz Ann Sonders noted on X Tuesday that, per Baird, third-quarter data center project cancellations “were almost larger than entirety of 2025 and 2024 combined.” Will that show up in their next reports?
The drop looks bigger than the risk
With two years mostly hedged and a below-average multiple, I think the market is overreacting to a Texas moratorium.
Of course, Vistra reports Thursday, Nov. 6, with an update to its 2027 outlook. If management says Texas buyers are pulling back, today’s drop will look a lot more reasonable.
So what is Vistra stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
