Data centers could drive growth for Vistra , according to Bank of America. The firm upgraded the electricity and power generation stock to buy from neutral, but lowered its price target to $152 per share from $164. BofA’s forecast still implies nearly 23% upside from Monday’s close. Analyst Ross Fowler said the rise and demand for data centers, which are essential components of powering artificial intelligence applications and programs, could be a catalyst for growth outside of the company’s core businesses. “While we do not factor datacenters into our valuation, we believe this could provide upside through the forecast period,” Fowler said. “We estimate nuclear co-location could add up to $385 mn in EBITDA and would increase the EBITDA compound annual growth rate (CAGR) by at least 1%.” But Vistra doesn’t need data centers in order to find growth ahead, the analyst noted. “We view the base business of baseload generation and competitive retail as well-positioned to benefit from tightening markets in PJM [Pennsylvania-New Jersey-Maryland Interconnection] and ERCOT [Electric Reliability Council of Texas], increasing demand and retail growth, regardless of datacenter deals,” the analyst said. Most analysts are bullish on the stock. LSEG data shows 14 of 15 analysts covering Vistra rate it a buy or strong buy. The average analyst price target implies upside of more than 45%.
Bank of America upgrades this energy stock that can get a boost from data center demand
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