TLDR
- Vistra stock fell 5.7% to $205.49 after Jefferies downgraded from “buy” to “hold”
- Price target cut from $241 to $230 following the stock’s climb beyond bull predictions
- VST hit record high of $219.73 in previous session, up from $30 two years ago
- Stock showing overbought signals with 14-day RSI at 80.9
- Options activity remains bullish with call/put ratio at 2.57 over past two weeks
Vistra Corp stock took a hit today after reaching new heights. The Texas utility company saw shares drop 5.7% to $205.49 following a downgrade from investment firm Jefferies.
The downgrade came just one day after VST touched a record high of $219.73. Jefferies moved the stock from “buy” to “hold” status while cutting their price target from $241 to $230.
The firm cited the stock’s meteoric rise as the reason for the change. They noted the climb went “beyond what any bull could have predicted years ago.”
The numbers tell quite a story. Two years ago, Vistra was trading around the $30 level. The recent surge pushed the stock above several key technical levels.
Technical Indicators Flash Warning Signs
The stock’s rapid ascent triggered some warning signals. The 14-day Relative Strength Index hit 80.9, placing it firmly in overbought territory.
This technical reading suggests the stock was due for a pullback. Despite today’s decline, VST remains up 9.3% since the start of September.
The recent climb also pushed shares above their 20-day moving average. This former resistance level had been acting as pressure on the stock.
Options traders had been betting heavily on continued gains. The 10-day call/put volume ratio reached 2.57 at major exchanges including ISE, CBOE, and PHLX.
This ratio sits higher than 95% of readings from the past year. It shows options bulls were extremely active leading up to yesterday’s peak.
Mixed Analyst Views Create Uncertainty
While Jefferies turned cautious, other firms remain upbeat. Scotiabank recently initiated coverage with a “sector outperform” rating and $256 price target.
Goldman Sachs maintains a neutral stance but raised their target to $203 in August. BMO Capital kept an outperform rating with a $229 target.
UBS also maintained a buy rating with a $230 price target. The average analyst target price across 16 firms stands at $207.13.
The current consensus rating of 1.8 indicates “outperform” status among 18 brokerage firms. However, GuruFocus estimates suggest the stock may be overvalued.
Their GF Value calculation points to a fair value of $72.08. This represents a substantial discount to current trading levels.
Options traders appear to be pricing in relatively low volatility ahead. The stock’s Schaeffer’s Volatility Index of 55% ranks in the 10th percentile of its annual range.
This suggests option premiums remain relatively cheap compared to historical levels. It could present opportunities for traders looking to position for the next move.
The Energy Harbor acquisition completed in 2024 expanded Vistra’s footprint to 41 gigawatts of generation capacity. The proposed Lotus Partners deal would add another 2.6 GW of natural gas assets.
