Best performing stock of 2024 crashes as analysts set higher price targets

It might come as a surprise to some readers that, at the moment of publication, Nvidia (NASDAQ: NVDA) is not the best-performing big name of 2024. And it isn’t a media favorite like MicroStrategy (NASDAQ: MSTR) or Palantir (NYSE: PLTR) — that title belongs to Vistra Corp (NYSE: VST), a Texas-based utility company that has seen gains of 235.36% year-to-date (YTD).

VST has benefited enormously from the AI boom — the energy business is the largest competitive power generator in the U.S. and a crucial piece of the puzzle for powering AI solutions.

However, every rally has to end somewhere — a lot of analysts, like Jim Cramer, already consider the stock overvalued. At press time, VST stock is trading at $127.87 — having experienced a 7.29% crash from a recent October 17 high of $137.

And while some, such as Cramer, are sure that the utility giant is due for a correction, equity researchers from top Wall Street firms remain bullish — initiating coverage or increasing their price targets.

Wall Street analysts’ average VST price targets

The October 17 pullback does not have a singular, clear catalyst — and unless something is publicized in the next couple of days, we’re likely looking at a very reasonable instance of profit-taking. While this would be a prudent move on the part of investors who have accrued unrealized gains, it would not necessarily signal a shift in the stock’s long-term outlook.

Even Cramer, who doubts that traditional utilities can sustain such growth, admitted that he would purchase shares at a more attractive price point, owing to Vistra’s crucial position in renewable energy, for which Cramer forecasts strong, continually rising demand going forward.

Whether or not a correction of any significance will occur remains to be seen — and Wall Street analysts are almost unanimously bullish in the long term. VST is a consensus ‘Strong Buy’ according to the 15 experts who issue ratings for the stock. Of the 15, 12 rate it a ‘Strong Buy’, with only two ‘Buy’ ratings and a single ‘Strong Sell’ rating.

The average price target is set at $148.17 — if reached, it would represent a gain of 15.87% compared to the current price of $127.87.

JPMorgan, Guggenheim, and BMO issue new ratings for VST

While investors should be careful not to fall prey to recency bias, the fact remains that some analysts update their ratings quite rarely. However, with the company’s next earnings report on November 7 just weeks away, three major Wall Street firms have issued new estimates for the stock.

Most notably, JPMorgan (NYSE: JPM) initiated coverage on October 17 — Jeremy Tonet, CFA, an executive director at the firm, gave VST an ‘Overweight’ rating, with a $178 price target. In a note, the analyst cited data center developments, broader electrification trends, and manufacturing onshoring as a paradigm shift for power demand, adding that JPM sees Vistra as the business with the most attractive risk/reward profile in the industry — even accounting for rally in VST share price.

The sentiment was echoed by Guggenheim’s Shahriar Pourreza on October 8, who reiterated a ‘Buy’ rating while raising his price target from $133 to $177. 

Last but not least, on October 4, James Thalacker, managing director at BMO Capital Markets, issued a more conservative price target at $146— slightly below consensus estimates. Thalacker maintained an ‘Outperform’ rating — his previous price target was $126, and he attributed the increase to a discussion with VST management, noting that he has a positive view of the stock’s fundamental outlook.

It’s hard to argue against industry veterans — prospective investors should keep an eye out for the results of the company’s Q3 2024 earnings, as they may provide a more appealing entry point for a long position.