DCF Studio

    VST · NYQ · Utilities

    Vistra Corp.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 28.60

    Market price

    USD 140.67

    Implied upside

    -79.7%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 28.60-79.7%
    Exit multiple
    USD 155.93+10.9%
    Market price
    USD 140.67

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 19.3bnUSD 21.0bnUSD 22.9bnUSD 25.0bnUSD 27.2bn+8.9%
    EBITUSD 2.2bnUSD 2.4bnUSD 2.6bnUSD 2.9bnUSD 3.1bn+8.9%
    NOPATUSD 1.8bnUSD 2.0bnUSD 2.1bnUSD 2.3bnUSD 2.5bn+8.9%
    Add depreciation & amortisationUSD 2.9bnUSD 3.2bnUSD 3.4bnUSD 3.7bnUSD 4.1bn+8.9%
    Less capital expenditureUSD -2.3bnUSD -2.5bnUSD -2.8bnUSD -3.0bnUSD -3.3bn+8.9%
    Less increase in working capitalUSD -269.1mUSD -293.1mUSD -319.3mUSD -347.8mUSD -378.8m+8.9%
    Free cashflow to firmUSD 2.1bnUSD 2.3bnUSD 2.5bnUSD 2.7bnUSD 3.0bn+8.9%
    Discount factor0.95470.87010.79310.72280.6588-
    Present valueUSD 2.0bnUSD 2.0bnUSD 2.0bnUSD 2.0bnUSD 1.9bn-0.7%
    Present Value Of The ForecastUSD 9.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.277Reported 1.414, pulled toward 1.0 (Blume)
    Cost of equity12.02%Risk-free + beta x equity risk premium
    Cost of debt5.29%Interest expense / average total debt
    Market capitalisationUSD 47.2bn70.2% of capital
    Total debtUSD 20.1bn29.8% of capital, book value as a proxy
    Tax rate18.9%Effective, capped at statutory
    WACC9.72%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 28.60

    66% of EV

    Forecast FCFF, final year
    USD 3.0bn
    Capex at depreciation, working capital in reinvestment
    USD 2.5bn
    Less reinvestment at g/ROIC (19.6% of NOPAT)
    USD -497.4m
    Capitalised
    USD 2.0bn
    ROIC (reported)
    12.8%
    Terminal value, undiscounted
    USD 29.0bn
    Terminal value, discounted
    USD 19.1bn
    Enterprise value
    USD 29.0bn
    Less net debt
    USD 19.3bn
    Equity value
    USD 9.7bn

    Exit at 13.1x EBITDA

    Value per shareUSD 155.93

    86% of EV

    Terminal value, undiscounted
    USD 94.3bn
    Terminal value, discounted
    USD 62.1bn
    Enterprise value
    USD 72.0bn
    Less net debt
    USD 19.3bn
    Equity value
    USD 52.7bn

    Spread between methods: 138%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.72%50.9054.3258.3663.2269.17
    8.72%36.7638.7941.1243.8146.99
    9.72%26.0427.2528.6030.1331.87
    10.72%17.6218.3319.1019.9520.89
    11.72%10.8311.2211.6312.0612.53

    Outlined: this model. Green text: above today's price of 140.67. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year8.9%33.6%+24.7pp
    EBIT margin11.5%27.3%+15.8pp
    Discount rate9.7%5.4%-4.3pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.