Constellation Energy vs. Vistra: Which Power Stock Is the Better Buy for 2027?

Key points

• Both power producers beat expectations and raised their 2026 outlooks within four days of each other, just after an election sell-off knocked their shares down.
• Constellation earned $5.06 per share on an adjusted basis in the third quarter, up 66%. Vistra grew adjusted EBITDA by 50% and gave 2027 guidance for the first time.
• Vistra is cheaper: about 12 times 2027 consensus earnings, against about 19 times for Constellation. We think it is the better buy for 2027, as long as investors accept the extra Texas risk.

Constellation Energy (NASDAQ: CEG) and Vistra (NYSE: VST), two of the largest U.S. power producers, were sold off hard after the Nov. 3 elections, then reported quarters well ahead of expectations. Constellation's adjusted earnings of $5.06 per share on Nov. 9 beat the $3.90 consensus by 30%. Vistra raised its 2026 profit outlook on Nov. 6 and set 2027 guidance above it. At Friday's close, Vistra traded at 12.4 times 2027 consensus earnings per share (EPS) and Constellation at 18.8 times. That gap is the core of our call: Vistra is the better buy, and Constellation is a hold.

What happened to power stocks this month

On Nov. 4, the day after the midterm elections, Vistra fell 13.8% and Constellation fell 6.7%, based on Maz Vantage's closing-price data. The trigger was Texas. Democrat Gina Hinojosa won the governor's race after promising "a moratorium — a ban — on all data center approvals" until the legislature passes new rules, according to KSAT. Investors had paid up for power stocks on the idea that AI data centers would buy their electricity, so a pause in Texas puts that story at risk.

The sell-off continued on Nov. 5. Over those two days Vistra lost 19.1% and Constellation lost 9.0%. Some analysts called it an "excessive knee-jerk" reaction, MarketWatch reported. Both stocks bounced on Nov. 6 after Vistra's report: Vistra rose 10.6% and Constellation 4.3%. Even so, at Friday's close Constellation was down 29% for 2026 and Vistra was down 23%. Constellation shares were indicated about 2.6% higher before the open on Nov. 9 after its results.

The quarters: two clear beats

Constellation's revenue rose 45% from a year earlier to $9.55 billion, mostly because it bought Calpine, a large gas-plant operator, in January. Adjusted operating earnings, which exclude items such as mark-to-market gains on hedges, rose 66% to $5.06 per share. GAAP net income nearly doubled to $1.84 billion, or $5.19 per share. The company raised the midpoint of its 2026 guidance and narrowed it to $12.50 to $12.80 per share, from $11.50 to $12.50 after the second quarter.

Vistra does not guide on EPS. It guides on adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted free cash flow before growth, which is the cash left after maintenance spending but before spending on new projects. Third-quarter adjusted EBITDA rose 50% to $2.38 billion. Its Texas segment grew 56% to $1.23 billion, and the East segment grew 36% to $979 million. Revenue of $6.35 billion beat the $6.03 billion consensus.

Sources: company releases, consensus estimates and Maz Vantage's data. EPS consensus for 2027 is the analyst average.

What management is building

Constellation is signing long contracts with large tech customers. During the quarter it signed a 20-year, 690-megawatt deal with Amazon tied to its Calvert Cliffs nuclear plant. It signed a 20-year agreement with Google that supports more than $4.3 billion of upgrades adding about 890 megawatts of nuclear capacity. It also won a conditional Department of Energy loan commitment of up to $5 billion for those upgrades. CEO Joe Dominguez said the approach shows the company "can power the growing digital economy while strengthening our electric grid." Constellation bought back $3.0 billion of stock in the first nine months of 2026.

Vistra closed its purchase of Cogentrix, about 5,500 megawatts of gas plants, in October. Its board added $1.5 billion to the buyback, leaving about $2.5 billion to spend by the end of 2028. That is roughly 6% of its market value. Most important for the Texas debate, Vistra says it has hedged about 98% of its expected 2027 generation and 78% of 2028. In other words, it has already sold that power forward at fixed prices.

Valuation: the gap is wide

The 2027 guidance midpoint implies about $4.7 billion of free cash flow before growth for Vistra. On a market value of about $41.9 billion, that is a yield of roughly 11%, or about $13.86 per share. Vistra's 2027 EBITDA midpoint of $8.1 billion is 11% above its 2026 midpoint.

Constellation is the higher-quality franchise. It is the largest U.S. producer of nuclear power. Its nuclear plants ran at a 97.2% capacity factor (output as a share of the maximum) in the quarter and emit no carbon. But the market already pays for that. At 18.8 times 2027 consensus EPS, it costs about 50% more per dollar of earnings than Vistra. The 2027 consensus of $13.32 is also only 5% above the new 2026 guidance midpoint, so analysts will likely raise it. Constellation also carries about $22.4 billion of net debt after the Calpine deal.

Bull case, bear case and our verdict

The bull case for Vistra: 2027 is almost fully hedged, so a Texas data center pause would not hit next year's cash flow much. A free cash flow yield near 11% pays for buybacks while investors wait. The bear case: Texas produced just over half of Vistra's third-quarter adjusted EBITDA. A long moratorium would cut into the new contracts that justify paying more for 2028 and later. ERCOT, the Texas grid, also has volatile prices that the hedges cover only for a limited time.

The bull case for Constellation: nuclear power is scarce, it has the most of it, and its 20-year deals with hyperscalers make its earnings more predictable. The bear case: at almost 19 times earnings, the price leaves little room for delays. Through Calpine, it also owns gas plants in Texas, so it is not immune to the state's policy shift.

Verdict: Vistra is a buy at $124.80, about 12 times 2027 consensus EPS and roughly 9 times guided 2027 free cash flow before growth. It rests on Vistra hitting its 2027 guidance and on Texas slowing data center growth rather than stopping it. Constellation is a hold at $249.95, about 19 times 2027 earnings. Its business is excellent, but the price already reflects most of that. For investors who want one power stock for 2027, Vistra offers more upside if the Texas fears ease and a hedged cushion if they don't.

What would change our view

• Texas policy: a formal data center moratorium that includes projects already in development would weaken the Vistra case. A narrower set of rules focused on water, grid costs or labor would support it.
• Vistra's 2027 delivery: any cut to the $7.7 billion to $8.5 billion EBITDA range, or a lower hedge ratio, would undo the valuation argument. Vistra's next report is expected around March 3, 2027, according to Maz Vantage's earnings calendar.
• Constellation estimates: if 2027 consensus EPS rises to about $15, the stock would trade near 17 times at today's price, and we would take another look.
• Contract flow: new long-term deals with large tech customers at either company would show demand holding up despite the politics.

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Prices are Nov. 6, 2026 closing prices (4:00 p.m. ET), with Constellation's pre-market indication as of about 7:25 a.m. ET on Nov. 9, 2026.

Data sources: Maz Vantage's market data, consensus estimates and quant grades; Constellation and Vistra third-quarter 2026 earnings releases filed with the SEC.

This article is general research, not personal investment advice. It does not consider your goals, timeline or tax situation.

AI disclosure: written with the help of AI tools from market data and the sources listed.

Sources: Constellation Energy, Form 8-K Q3 2026 earnings release, SEC, Nov. 9, 2026, https://www.sec.gov/Archives/edgar/data/0001868275/000186827526000116/ceg-20261109991.htm; Vistra Corp., Form 8-K Q3 2026 earnings release, SEC, Nov. 6, 2026, https://www.sec.gov/Archives/edgar/data/0001692819/000169281926000023/vistra-20260930xearningsre.htm; KSAT, "Gina Hinojosa won the governor's race. What happens to Texas data centers now?", Nov. 4, 2026, https://www.ksat.com/news/texas/2026/11/04/gina-hinojosa-won-the-governors-race-what-happens-to-texas-data-centers-now/; MarketWatch, "As Vistra and other energy stocks slide, some analysts warn of an 'excessive knee-jerk' reaction", Nov. 4, 2026, https://www.marketwatch.com/story/as-vistra-and-other-energy-stocks-slide-some-analysts-warn-of-an-excessive-knee-jerk-reaction-aece0737; Benzinga, "Vistra Stock Soars After Surprising Q3 Sales Results", Nov. 6, 2026, https://www.benzinga.com/trading-ideas/movers/26/11/62994675/vistra-stock-soars-after-surprising-q3-sales-results; Investing.com, "Constellation shares up 4% in premarket trade on Q3 earnings beat, higher outlook", Nov. 9, 2026, https://au.investing.com/news/earnings/constellation-shares-up-4-in-premarket-trade-on-q3-earnings-beat-higher-outlook-4754767; Seeking Alpha, "Vistra: Q3 Confirms The Midterm Fear Is The Opportunity", Nov. 7, 2026, https://seekingalpha.com/article/4964555-vistra-q3-confirms-the-midterm-fear-is-the-opportunity.